Cumulation and injury determination of the European community in antidumping cases

Injury Investigations in anti-Dumping and the Super-Additivity Effect: A Theoretical Explanation

“…Extending the example to five countries, holding constant the market share of imports, the probability rises to .78 or by 30 percent. Tharakan, Greenaway and Tharakan (1998) provide similar examples using the estimates for the EC. The probability of an affirmative finding rises from .92 for two countries to .98 for 3 countries, holding constant the market share of imports under investigation.…”

“…1 That cumulation should raise the probability of a positive injury determination is not surprising: adding one more country to the set of countries investigated raises the market share of the accused firms and, ceteris paribus, must make the case for a positive finding stronger. The surprising aspect of the Hansen and Prusa (1996) and Tharakan, Greenaway and Tharakan (1998) studies is the presence of what the former call the "super-additivity" effect: for the same market share, cumulation raises the probability of affirmative injury determination.…”

“…While only 13 percent of the anti-dumping cases were subject to cumulation between 1980-84, as many as 75 percent became subject to this practice between 1985 and 1994. According to Tharakan, Greenaway and Tharakan (1998), cumulation has also been practiced liberally in the European Communities (EC). During 1980-87, 91 percent of the multiple-country filings were determined on the basis of the cumulated market share of imports.…”

“…During 1980-87, 91 percent of the multiple-country filings were determined on the basis of the cumulated market share of imports. Hansen and Prusa (1996) and Tharakan, Greenaway and Tharakan (1998) study the experience of the United States and EC, respectively, and show that holding the share of defendant firms in total sales constant, cumulation increases the probability of an affirmative injury determination. According to an example considered in Hansen and Prusa (1996), when 40 percent of imports are under investigation and a single country is involved, the probability of an affirmative injury finding is 0.60.…”

“…Stated precisely, they find that, holding the market share of defendant firms constant, "cumulation," defined as the practice of aggregating over the exports of several countries, has a positive effect on the probability of an affirmative injury determination. A subsequent paper by Tharakan, Greenaway and Tharakan (1998) …”