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Imports, Pass-Through, and the Structure of Retail Markets

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Author Info
Horst Raff ()
Nicolas Schmitt ()
Abstract

We construct a model of trade with heterogeneous retailers to examine the effects of trade liberalization on retail market structure, imports and social welfare. We are especially interested in studying the degree of pass-through of import into retail prices and the effects of retail market regulation. The paper shows that the degree of pass-through may be large when market structure effects are taken into account, and that restrictions on retailing may have significant effects on imports and the degree of pass-through. The paper helps explain the apparent discrepancy between the low observed degree of pass-through and the large benefit that consumers seem to derive from trade liberalization.

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File URL: http://www.cesifo.de/DocCIDL/cesifo1_wp2817.pdf
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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 2817.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2817

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Related research
Keywords: international trade; retailing; pass-through; firm heterogeneity;

Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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This page was last updated on 2009-11-3.

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