Bifurcated vs. Single Injury Determination in USITC Antidumping Investigations

Bifurcated vs. Single Injury Determination in USITC Antidumping Investigations

The Trade Agreements Act of 1979 mandates that a material injury determination be made in unfair trade practices investigations. These are conducted by the U.S. International Trade Commission(USITC). The USITC has generally, but not consistently, followed a bifurcated injury determination procedure. This is controversial and is alleged to be dispositive. A bifurcated procedure militates against finding affirmatively on the basis of threat of injury. Using a cross sectional regression to explain abnormal returns generated on decision dates in the investigation of unfair practices, this paper provides a profile of firms that are likely to benefit from protection. These are the firms that are likely to be denied protection by the bifurcated procedure.