The effect of international trade on mark-ups distribution
AbstractThis paper presents empirical evidence about the relationship between market openness and markup distribution of manufacturing firms. The empirical analysis uses a panel data set of Spanish firms in the period 1990-2005, with a structural approach that lets us to identify individual mark-ups. The results point out that tougher competition associated to openness reduces the average of marginal costs and prices, while it increases the average firm size. However, the evidence about the effect on average markups and the dispersion of performance variables is weaker. These results partially support the theoretical predictions by the recent literature on efficiency heterogeneity and international trade and, in particular, Melitz and Ottaviano (2008).
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 22652.
Date of creation: 2009
Date of revision:
markups; marginal costs; size; openness;
Other versions of this item:
- Diego Rodriguez & Lourdes Moreno, 2013. "The effect of international trade on markups distribution," Economics and Business Letters, Oviedo University Press, vol. 2(1).
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
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.:
- Lourdes Moreno & Diego Rodríguez, 2004.
"Domestic and Foreign Price/Marginal-cost Margins: an Application to Spanish Manufacturing Firms,"
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201, Centro Studi Luca d\'Agliano, University of Milano.
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- Ottaviano, Gianmarco & Melitz, Marc, 2008. "Market Size, Trade, and Productivity," Scholarly Articles 3229096, Harvard University Department of Economics.
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-1553, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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- Ottaviano, Gianmarco Ireo Paolo & Thisse, Jacques-François, 1998. "Agglomeration and Trade Revisited," CEPR Discussion Papers 1903, C.E.P.R. Discussion Papers.
- Gianmarco Ottaviano & Takatoshi Tabuchi & Jacques-Francois Tissse, 1999. "Agglomeration and Trade Revisited," CIRJE F-Series CIRJE-F-65, CIRJE, Faculty of Economics, University of Tokyo.
- Lourdes Moreno Martin & Diego Rodriguez Rodriguez, 2010. "Export activity, persistence and mark-ups," Applied Economics, Taylor & Francis Journals, vol. 42(4), pages 475-488.
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