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Import Competition and Market Power: Canadian Evidence

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    Abstract

    Part of Introduction: A number of international trade models have now been developed that account for imperfect competition. Although some of these models provide insight into situations where trade protection may be welfare improving, most indicate that imperfect competition provides additional sources of gains from trade. Many of these gains result from the “pro-competitive” effect of trade: import competition increases the perceived elasticity of demand for domestic firms, leading them to reduce their mark-ups of price over marginal cost.

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    File URL: http://www1.carleton.ca/economics/ccms/wp-content/ccms-files/cep99-14.pdf
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    Bibliographic Info

    Paper provided by Carleton University, Department of Economics in its series Carleton Economic Papers with number 99-14.

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    Length: 24 pages
    Date of creation: Dec 1999
    Date of revision: Mar 2000
    Publication status: Published: Carleton Economic Paper
    Handle: RePEc:car:carecp:99-14

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    1. Ian Domowitz & R. Glenn Hubbard & Bruce C. Petersen, 1986. "Business Cycles and the Relationship Between Concentration and Price-Cost Margins," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 1-17, Spring.
    2. Baldwin,John R. & Gorecki,Paul With contributions by-Name:Caves,Richard E. With contributions by-Name:Dunne,Tim With contributions by-Name:Haltiwanger,John, 1998. "The Dynamics of Industrial Competition," Cambridge Books, Cambridge University Press, number 9780521633574, Fall.
      • Baldwin,John R. & Gorecki,Paul With contributions by-Name:Caves,Richard E. With contributions by-Name:Dunne,Tim With contributions by-Name:Haltiwanger,John, 1995. "The Dynamics of Industrial Competition," Cambridge Books, Cambridge University Press, number 9780521465618, Fall.
    3. Markusen, James R. & Rutherford, Thomas F. & Hunter, Linda, 1995. "Trade liberalization in a multinational-dominated industry," Journal of International Economics, Elsevier, vol. 38(1-2), pages 95-117, February.
    4. Pravin Krishna & Devashish Mitra, . "Trade Liberalization, Market Discipline and Productivity Growth: New Evidence From India," Working Papers 96-8, Brown University, Department of Economics.
    5. de Melo, Jaime & Urata, Shujiro, 1986. "The influence of increased foreign competition on industrial concentration and profitability," International Journal of Industrial Organization, Elsevier, vol. 4(3), pages 287-304, September.
    6. Joaquim Oliveira Martins & Stefano Scarpetta & Dirk Pilat, 1996. "Mark-Up Ratios in Manufacturing Industries: Estimates for 14 OECD Countries," OECD Economics Department Working Papers 162, OECD Publishing.
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