Skip to main content

Price undertakings, VERs, and foreign direct investment: the case of foreign rivalry

Buy Article:

$51.00 plus tax (Refund Policy)



Antidumping (AD) petitions are often withdrawn in favour of voluntary export restraints (VERs) and price undertakings. This paper compares these policy options in the presence of protection-jumping foreign direct investment (FDI), with special emphasis on rivalry between foreign firms. We show that a VER is less likely to induce FDI than a price undertaking or AD. As a result, by settling AD cases with VER agreements, the importing country can pursue a more protectionist policy without triggering FDI. In this sense the GATT ban on VERs following the proliferation of AD uses was a sensible decision.

Keywords: F1

Document Type: Research Article


Affiliations: 1: Faculty of Economics, Hitotsubashi University 2: Department of Economics, Emory University, and ISER, Osaka University

Publication date: August 1, 2008

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more