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Openness To Trade And Industry Cost Dispersion: Evidence From A Panel Of Italian Firms

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Author Info
Massimo Del Gatto
Gianmarco I. P. Ottaviano
Marcello Pagnini

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Abstract

We use Italian firm-level data to investigate the impact of trade openness on the distribution of firms across marginal cost levels. In so doing, we implement a procedure that allows us to control not only for the standard transmission bias identified in firm-level TFP regressions but also for the omitted price bias due to imperfect competition. We find that more open industries are characterized by a smaller dispersion of costs across active firms. Moreover, in those industries the average cost is also smaller. Copyright Blackwell Publishing, Inc. 2008

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9787.2008.00546.x
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Publisher Info
Article provided by Blackwell Publishing in its journal Journal of Regional Science.

Volume (Year): 48 (2008)
Issue (Month): 1 ()
Pages: 97-129
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Handle: RePEc:bla:jregsc:v:48:y:2008:i:1:p:97-129

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. ITO Keiko & Sebastien LECHEVALIER, 2008. "The evolution of the productivity dispersion of firms - A reevaluation of its determinants in the case of Japan," Discussion papers 08014, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
  2. Toshihiro Okubo & Pierre M. Picard & Jacques-François Thisse, 2008. "The spatial selection of heterogeneous firms," Discussion Paper Series 229, Research Institute for Economics & Business Administration, Kobe University. [Downloadable!]
    Other versions:
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