facing cyclical dumping and/or rapidly declining prices for competing imports find it easier to provide evidence of dumping and are thus more likely to be successful in pursuing antidumping.

Next we create two indicators of “injury” to include in the estimation.<sup>18</sup> The first is the average yearly growth of industry output in the post-1995 period. Industries with declining output are more likely to pursue and be granted antidumping import protection because they are better positioned to provide evidence of injury. Our second variable is defined as the average yearly change in the industry’s import penetration ratio over the period.<sup>19</sup> Industries that face rapidly increasing import competition are more likely to be injured and to be able to blame that injury on dumped imports than industries in which import competition has not been increasing.

# **3.3.2  Political-economic determinants**

Next consider the variables that the theory of endogenous trade policy suggests as potentially affecting the pursuit and receipt of antidumping import protection. We construct two variables designed to capture the size of the industry, which may affect both its ability to overcome the resource cost of an antidumping investigation and the political value to domestic policymakers of protecting the industry. The first is the dollar value of industry output in 1994. The second variable is the 3-digit ISIC industry’s 1994 share of the country’s total employment.<sup>20</sup> The theory suggests that larger industries are more likely to pursue antidumping and to find sympathetic policymakers willing to grant them protection from imports.

Nevertheless, large industries may have difficulty organizing politically to pursue antidumping protection if they are also diffuse. Hence, we seek a measure of the concentration of the industry to control for its ability to overcome the free rider problem and organize successfully. The TPP includes a variable indicating the number of establishments in each industry in 1994, which we use as our concentration measure.<sup>21</sup> Once we control for industry size with our output and employment variables described above, we expect that industries with fewer establishments are more likely to be able to organize politically to pursue antidumping protection and to be able to coordinate a more compelling legal case to convince domestic policymakers to impose an antidumping measure, ceteris paribus.

18 Some antidumping authorities are also likely to use the falling import price variable as an indicator of injury, given the quotation from the Antidumping Agreement in section 2.1.

19 The import penetration ratio is constructed from the 3-digit ISIC data in the TPP. The numerator is the industry’s import value, and the denominator is output + import value – export value.

> 20 For the denominator of this variable, we take as our total labor force measure the country’s “total economically active population” from the International Labour Organization’s (http://laborsta.ilo.org/) labor force surveys.

> 21 The measure typically used in studies involving the US would be the four-firm concentration ratio or a Herfindahl index. Such measures are not systematically available for industries in the developing countries in our sample.

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