In the real world, an anti-dumping policy is considered to be a mechanism that advances the interests of domestic producers. Konings and Vandenbussche (2005) use panel data for about 4000 European Union (EU) producers that have been involved in anti-dumping cases to estimate markups both before and after the filing of a case, and find that anti-dumping protection has both positive and significant effects on domestic markups. Anti-dumping policies also have potential impacts on the behaviors or strategies of both domestic and foreign industries. For example, Dinlersoz and Dogan (2009) compare the relative merits of tariffs and antidumping duties. Wu, Chang, and Chen (2014) investigate the welfare effects of anti-dumping duty and price undertaking policies. Antidumping policies may also encourage foreign firms to engage in FDI (Belderbos, 1997; Blonigen, 2002; Belderbos, Vandenbussche and Veugelers, 2004), change the cost-reducing R&D intensity of both domestic and foreign firms (Gao and Miyagiwa, 2005), or improve their product quality (Vandenbussche and Wauthy, 2001). Understanding a firm’s R&D behavior has been an important objective of industrial organization. A substantial literature has highlighted the welfare consequences of marginal-cost-reducing (process) R&D investment (see for example, Arrow, 1962; Brander and Spencer, 1983; D’Aspremont and Jacquemin, 1988; Chang, Hwang, and Peng, 2013, among others). More recently, the literature on R&D has started to center on product R&D and its link with process R&D (for example, Cohen and Klepper, 1996; Bonanno and Haworth, 1998; Lin and Saggi, 2002, Symeonidis, 2003). In particular, Miyagiwa and Ohno (1999) find that temporary safeguard protection can increase process R&D if the commitment to dismantle protection by policymakers is credible, but may reduce R&D if they believe policymakers will extend protection. Haaland and Kind (2008) examine the industrial process R&D investment and tariff competition between countries in an international setting. They show that trade liberalization generates more R&D and that the policy competition between countries critically depends on the competitiveness of the market. The empirical evidence has shown that anti-dumping policies often target R&D-intensive industries such as the electronics, primary metals, chemical and mechanical engineering industries (Niels, 2000). Thus it is important to investigate the R&D behavior of such industries under anti-dumping policies. Gao and Miyagiwa (2005) is the first paper to investigate the impact of anti-dumping policies on the cost-reducing R&D incentives of the protected firm and the constrained firm. Given an ad valorem transport cost, they find that a unilateral anti-dumping policy decreases (increases) the cost-reducing R&D of the protected (constrained) firm.