The Impact of Imports on Price-Cost Margins: An Empirical Illustration
AbstractThis article decomposes the impact of imports on domestic price-cost margins into separate price and cost effects. Using data from 24 food-processing industries, the empirical results show that although the direct impact of imports on prices is always negative, a positive net impact on price-cost margins occurs in industries characterized by low own-price elasticity of demand and diseconomies of scale. Further results show that the disciplining effect of imports is more preponderant the lower the degree of domestic competition.
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Bibliographic InfoPaper provided by University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy in its series Food Marketing Policy Center Research Reports with number 061.
Date of creation: 2001
Date of revision:
Market power; imports; market structure; international trade; food industry; Agribusiness; Demand and Price Analysis; International Relations/Trade;
Other versions of this item:
- Rigoberto A. Lopez & Elena Lopez, 2003. "The impact of imports on price-cost margins: An empirical illustration," Empirical Economics, Springer, vol. 28(2), pages 403-416, 04.
- Lopez, Rigoberto A. & Lopez, Elena, 2001. "The Impact of Imports on Price-Cost Margins: An Empirical Illustration," Research Reports 25153, University of Connecticut, Food Marketing Policy Center.
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