Abstract
Based on the anti-dumping (AD) cases initiated by 20 countries (regions) against China, this study explores the effect of exporters' innovation on AD investigations. We find that innovative exporters are vulnerable to AD investigations. Further tests reveal that innovation mainly affects AD investigations via an increase in the perceived threat of foreign competitors, instead of an increase in the possibility of dumping. Innovation's effect is more pronounced for observations with lower export volume and share, revealing the signaling effect of innovation. This study illustrates the mechanism between innovation and AD, enriches literature on AD determinants and innovation's negative consequence, and highlights the abuse of AD laws.
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