Industrial determinants of anti-dumping in Brazil – Protection, competition and performance: An analysis with binary dependent variable and panel data

Abstract

Abstract This article investigates how sectorial characteristics determine the probability of industries receiving an anti-dumping (AD) duty, delving into the economic literature on the political economy of protection, market competition and trade reform in Brazil. By focusing on when the AD was granted, the article concentrates on the objective economic motivations for an industry to claim protection and which are instrumental to the decision of the trade defense authority. The empirical strategy involves a panel of 93 industrial sectors from 1996 to 2007 to create four groups of explanatory variables (collective action/competition, economic performance, factors of production, trade coefficients), reflecting their structural characteristics, market competition, economic performance and political mobilization. The econometric specifications apply binary dependent variable models ( logit ) with cluster robust and population-averaged error correction. The results show that structure of trade (imports volume and tariffs), economic performance (productivity and investments), and factor content (labor and natural resources) influence the probability of the AD. Political economy characteristics (captured by interactive terms) are also influential in determining the measure.