Antidumping policies are often justified as legitimate actions by gove
rnments in their efforts to protect domestic producers from unfair for
eign competition. The authors investigate the impact of antidumping ru
les on firms' production decisions as to how much and where to produce
. Antidumping measures may have unforeseen effects if they induce dire
ct foreign investment and consequently increase domestic competition.
The authors therefore focus on location choice and consider the strate
gies of national governments attempting to advance the interests of th
eir citizens through antidumping legislation. The analysis also has im
plications for the effects of market integration policies, such as Eur
ope 1992. JEL no. F12, F13, L11.