International Trade and Trade Restrictions
In this part, Lin, Chiou and Liu report their research on the Japanese penetration of the U.S. automobile market, and Robert W. McGee provides a spirited attack on U.S. antidumping policies.
Other chapters in this book have touched on areas where the United States is changing the systems of global business. In this section Lin, Chiou and Liu deal with the U.S.-Japanese battle for market share in the U.S. automobile market. McGee analyzes the U.S. application of antidumping law in Latin America and finds these practices to be anticompetitive.
Lin, Chiou and Liu offer a strategic prescription through which U.S. automobile manufacturers can regain the market share that they have lost to the Japanese by improving the quality and reliability of U.S. cars. This chapter is optimistic about the competitive future of U.S. auto manufacturers. These authors argue that it was not quality alone that accounted for Japanese success in penetrating the U.S. market. The state-dependent consumer theory of this chapter's research methodology shows that the Japanese success was attributable to a complex of factors including the quality of the products, and the complementarity and price of gasoline and automobiles. As these conditions change and U.S. manufacturers reduce the "trouble index" of their vehicles, the authors predict that U.S. manufacturers will regain some of their lost market share.