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Practical contribution for the assessment and monitoring of product market competition in the Portuguese Economy – estimation of price cost margins

Author

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  • Luis Folque

    (NOVA – School of Business and Economics)

Abstract

This work project estimates price-cost margins for 163 Portuguese markets (defined at 3-digit level of CAE), with the aim of assessing the degree of product market competition. During the Economic and Financial Assistance Program of 2011-14, a set of product market reforms was implemented, with the objective of increasing competition in output markets. We provide a first assessment of the effectiveness of these reforms. We use Portuguese firm-level data to estimate price-cost margins, allowing for worker’s bargaining power. By then aggregating markets into sectors, our results allow us to conclude that the degree of competition did increase in most sectors

Suggested Citation

  • Luis Folque, 2016. "Practical contribution for the assessment and monitoring of product market competition in the Portuguese Economy – estimation of price cost margins," GEE Papers 0063, Gabinete de Estratégia e Estudos, Ministério da Economia, revised May 2016.
    • Handle: RePEc:mde:wpaper:0063
    as

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    File URL: https://www.gee.gov.pt/RePEc/WorkingPapers/GEE_PAPERS_63.pdf
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    References listed on IDEAS

    as
    1. Olivier Blanchard & Francesco Giavazzi, 2003. "Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 879-907.
    2. Ana Cristina Soares & João Amador, 2013. "Competition in the Portuguese Economy: Estimated Price-Cost Margins Under Imperfect Labour Markets," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    3. S. Dobbelaere, 2003. "Joint Estimation of Price-Cost Margins and Union Bargaining Power for Belgian Manufacturing," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/171, Ghent University, Faculty of Economics and Business Administration.
    4. Konings, Jozef & Vandenbussche, Hylke, 2005. "Antidumping protection and markups of domestic firms," Journal of International Economics, Elsevier, vol. 65(1), pages 151-165, January.
    5. Mr. Luc Everaert & Mr. Werner Schule, 2006. "Structural Reforms in the Euro Area: Economic Impact and Role of Synchronization Across Markets and Countries," IMF Working Papers 2006/137, International Monetary Fund.
    6. Ángel Estrada, 2009. "The mark-ups in the Spanish economy: international comparison and recent evolution," Working Papers 0905, Banco de España.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    competitiveness; Portuguese Economy; product market reform; mark-up;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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