Moreno, L and Rodríguez, D (2009): The effect of international trade on mark-ups distribution.
Download (68kB) | Preview
This paper presents empirical evidence about the relationship between market openness and markup distribution of manufacturing firms. The empirical analysis uses a panel data set of Spanish firms in the period 1990-2005, with a structural approach that lets us to identify individual mark-ups. The results point out that tougher competition associated to openness reduces the average of marginal costs and prices, while it increases the average firm size. However, the evidence about the effect on average markups and the dispersion of performance variables is weaker. These results partially support the theoretical predictions by the recent literature on efficiency heterogeneity and international trade and, in particular, Melitz and Ottaviano (2008).
|Item Type:||MPRA Paper|
|Original Title:||The effect of international trade on mark-ups distribution|
|Keywords:||markups, marginal costs, size, openness|
|Subjects:||F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies
L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General
|Depositing User:||L Moreno|
|Date Deposited:||15. May 2010 14:27|
|Last Modified:||13. Feb 2013 21:55|
Bernard, A.B., J. Eaton, J. Jensen and S. Kortum (2003): “Plants and Productivity in International Trade”, American Economic Review, 93, pp. 1268–1290.
Bernstein, J. and P. Mohnen (1991): "Price-Cost Margins, Exports and Productivity growth: with an Application to Canadian Industries," Canadian Journal of Economics, 24, pp. 638-659.
Melitz, M.J. (2003): “The impact of trade on intra-industry reallocations and aggregate industry productivity”, Econometrica, 71(6), pp. 1695-1725.
Melitz, M. J. and G.I.P. Ottaviano (2008): "Market Size, Trade, and Productivity", The Review of Economic Studies, 75, pp. 295-316.
Moreno, L. and D. Rodríguez (2004): “Domestic and Foreign Price-Marginal Cost Margins: An Application to Spanish Manufacturing Firms”, Review of International Economics, 12 (1), pp. 60-80.
Moreno, L. and D. Rodríguez (2010): “Export activity, persistence and mark-ups”, Applied Economics, 42, pp. 475-488.
Ottaviano, G.I.P., T. Tabuchi and J.F. Thisse (2002): “Agglomeration and Trade Revisited”, International Economic Review, 43, pp. 409-436.
Roeger, W. (1995): “Can imperfect competition explain the difference between primal and dual productivity measures? Estimates for U.S. Manufacturing, Journal of Political Economy, 103 (2), pp 316-330.