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Competitive Pressures From Trade Exposure: Evidence from Indian Manufacturing

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Author Info

  • Kunal Sen

    (University of East Auglia)

  • S. Chand

    (Australian Taxation Office, Canberra)

Abstract

Does exposure to international trade have a pro-competitive effect on domestic pricing? This paper attends to this question in two stages: first, by developing a simple methodology to test the above proposition by linking domestic pricing behaviour to external competition via a simple mark-up technology; next, disaggregated Indian manufacturing data is used to show that the sector is imperfectly competitive and that both price and quantity competition from abroad over the last twenty years has had a dampening effect on domestic pricing behaviour.

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Bibliographic Info

Article provided by Department of Economics, Delhi School of Economics in its journal Indian Economic Review.

Volume (Year): 34 (1999)
Issue (Month): 2 (July)
Pages: 113-126

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Handle: RePEc:dse:indecr:v:34:y:1999:i:2:p:113-126

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Cited by:
  1. Uma Kambhampati & Ashok Parikh, 2003. "Disciplining firms: the impact of trade reforms on profit margins in Indian industry," Applied Economics, Taylor & Francis Journals, vol. 35(4), pages 461-470.
  2. Menon, Nidhiya & Rodgers, Yana van der Meulen, 2009. "International Trade and the Gender Wage Gap: New Evidence from India's Manufacturing Sector," World Development, Elsevier, vol. 37(5), pages 965-981, May.

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