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Korean Dumping and Domestic Market Power
We model “dumping” as price discrimination assuming profit maximization by Korean firms prior to OECD and WTO membership. We show that the ratio of domestic prices, PD, to export prices, PX, can be derived from domestic and export price-cost margins. Accounting mismeasurements of costs cancel out in this dependent variable. Our structural model captures differential efficiencies in market shares and demand elasticities as non-linear fixed effects. PD/PX is a strongly positive function of Concentration.
