Competitive Pressures From Trade Exposure: Evidence from Indian Manufacturing
Does exposure to international trade have a pro-competitive effect on domestic pricing? This paper attends to this question in two stages: first, by developing a simple methodology to test the above proposition by linking domestic pricing behaviour to external competition via a simple mark-up technology; next, disaggregated Indian manufacturing data is used to show that the sector is imperfectly competitive and that both price and quantity competition from abroad over the last twenty years has had a dampening effect on domestic pricing behaviour.
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Volume (Year): 34 (1999)
Issue (Month): 2 (July)
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