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Pro-competitive Effect of Trade and Non-decreasing Price-Cost Margins

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  • Herve Boulhol

Abstract

This study surveys the empirical evidence on the pro-competitive effect of international trade and analyses the determinants of price-cost margins for OECD countries between 1970 and 2003. The main objective was to focus on the quantification of the impact of imports on margins, and understand why, despite trade liberalization, price-cost margins have not fallen overall. On average, imports would have contributed to a large decrease of five percentage points in the price-cost margins. However, these effects seem to have been partially counterbalanced by the impacts of financial deepening and disinflation. Copyright (c) Blackwell Publishing Ltd and the Department of Economics, University of Oxford, 2010.

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  • Herve Boulhol, 2010. "Pro-competitive Effect of Trade and Non-decreasing Price-Cost Margins," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(3), pages 326-356, June.
  • Handle: RePEc:bla:obuest:v:72:y:2010:i:3:p:326-356
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    Cited by:

    1. Bertinelli, Luisito & Cardi, Olivier & Sen, Partha, 2013. "Deregulation shock in product market and unemployment," Journal of Economic Dynamics and Control, Elsevier, vol. 37(4), pages 711-734.
    2. Giammario Impullitti & Omar Licandro, 2018. "Trade, Firm Selection and Innovation: The Competition Channel," Economic Journal, Royal Economic Society, vol. 128(608), pages 189-229, February.
    3. Khan, Hashmat & Kim, Bae-Geun, 2013. "Markups and oil prices in Canada," Economic Modelling, Elsevier, vol. 30(C), pages 799-813.
    4. J. Stephen Ferris, 2012. "The Relationship Between Government Size and Economic Performance with Particular Application to New Zealand," Carleton Economic Papers 12-06, Carleton University, Department of Economics, revised 25 Apr 2013.
    5. Balázs Égert & Antoine Goujard, 2014. "Strengthening Competition in Poland," OECD Economics Department Working Papers 1125, OECD Publishing.

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