Strict trade measures, flexible financing

Abstract

This study investigates the effect of antidumping policy on the payment methods in trade transactions. Using three-dimensional (country–HS6 product-year) data on payment methods in imports and detailed data on antidumping activity from Turkey, we show that antidumping duties lead to more exporter-financed transactions for the targeted country-product pairs compared to a control group of nontargeted ones. Our findings suggest that exporters offer better financing options when they face competitive pressure in their export destinations because of discriminatory trade policy.