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Price-cost Margins and Economic Integration: How Important is the Pro-competitive Effect?

Author

Listed:
  • Oscar Bajo-Rubio
  • Carmen Díaz-Roldán
  • Antonio G. Gómez-Plana

Abstract

type="main" xml:id="twec12245-abs-0001"> In this paper, we examine whether the so-called pro-competitive effect holds when two countries integrate by forming a common market. We propose a general framework of reference, where the price-cost margin of domestic firms depends on a set of variables in addition to trade costs with the partner country, which might eventually offset the conventional result.

Suggested Citation

  • Oscar Bajo-Rubio & Carmen Díaz-Roldán & Antonio G. Gómez-Plana, 2015. "Price-cost Margins and Economic Integration: How Important is the Pro-competitive Effect?," The World Economy, Wiley Blackwell, vol. 38(5), pages 893-898, May.
  • Handle: RePEc:bla:worlde:v:38:y:2015:i:5:p:893-898
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    File URL: http://hdl.handle.net/10.1111/twec.2015.38.issue-5
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    Cited by:

    1. is not listed on IDEAS
    2. Antonio G. Gómez-Plana & Oscar Bajo-Rubio, "undated". "Algunos efectos del mercado único europeo sobre la economía espanola: Un análisis a través de un modelo de equilibrio general aplicado," Studies on the Spanish Economy 213, FEDEA.

    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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