imports.<sup>3</sup> Since formal WTO disputes have actually challenged developing country government use of antidumping only on rare occasion, there has been little oversight to determine whether even the basic evidentiary conditions of injury, imports, and dumping have been satisfied in individual cases.<sup>4</sup> Our econometric analysis thus also examines whether the industry decision to pursue an antidumping investigation and to impose a trade-restricting measure are at least consistent with the changing market conditions that are legally required under the WTO Agreement.

The lower half of table 3 shows that industries that pursued AD investigations over the 19952003 period were, on average, more likely to face changing market conditions consistent with the WTO mandate than the industries that did not pursue antidumping.<sup>5</sup> First, industries that sought antidumping protection were more likely to face cyclical dumping than non-initiating industries, as they were characterized by a higher average capital expenditure relative to value added (22.6% versus 14.2%). Furthermore, they faced prices of competing imported products that were falling more rapidly on average (-1.5% versus -1.1%) than industries that did not use AD. The industries that sought antidumping also had slower output growth on average (3.2% versus 5.6%) and slightly more rapid growth of import penetration (5.5% versus 5.2%) than industries that did not pursue antidumping investigations.

This paper provides an econometric investigation as to whether the suggestive industry statistics for developing countries presented in table 3 are economically and statistically important once we control for a number of factors affecting whether an industry pursues and is granted antidumping import Nevertheless, our estimation focuses on the post-1995 period since this is when various rules for antidumping and enforcement became consistent across countries, as we detail below.

3 We do not suggest that the evidence legally required for imposition of new import restrictions under the WTO Antidumping Agreement is relevant from an economic welfare perspective. Indeed, most economists view antidumping as nothing more than an easy-to-access alternative to a safeguard import restriction, given that the specified evidence for dumping does not require predation or anticompetitive elements and can be consistent with other forms of non-predatory behavior (e.g., price discrimination, cyclical dumping via pricing below average cost during periods of economic downturns) legally accepted by many countries in the context of domestic firm behavior. This paper simply examines whether the industries pursuing and receiving antidumping protection face changing economic conditions consistent with the evidentiary criteria specified by the Agreement.

4 Even though these nine countries collectively initiated over 1000 antidumping investigations between 1995 and 2004, WTO members filed only 16 formal disputes against them over antidumping (Bown, 2006). This contrasts with the United States, which initiated only 354 antidumping investigations over this same period and yet faced over 30 formal WTO challenges relating to antidumping alone (Bown, 2005b). An alternative form of review could come under the WTO Trade Policy Review Mechanism (TPRM), where member trade policies are examined periodically. Nevertheless, developing country policies are reviewed very infrequently (the largest are reviewed only once every four years, and most others once every six years). Moreover the TPRM is not intended to examine the evidence submitted or the rulings in antidumping investigations on a case-by-case basis.

5 The evidence presented here and our formal econometric evidence below only compare AD-using versus nonusing industries. Thus, our analysis can only examine whether the data on changing market conditions for AD-using industries are consistent with the evidentiary requirements. We do not examine whether the users of AD are industries facing changing market conditions relative to an absolute benchmark. For example, table 3 illustrates that AD-using industries on average had output that was growing more slowly than non-initiating industries. We do not 2