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The impact of imports on price-cost margins: An empirical illustration

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  • Rigoberto A. Lopez
  • Elena Lopez

Abstract

This 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. Copyright Springer-Verlag Berlin Heidelberg 2003

Suggested Citation

  • 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, April.
  • Handle: RePEc:spr:empeco:v:28:y:2003:i:2:p:403-416 DOI: 10.1007/s001810200138
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    References listed on IDEAS

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    12. Sanjib Bhuyan & Rigoberto A. Lopez, 1997. "Oligopoly Power in the Food and Tobacco Industries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 1035-1043.
    13. Haubrich, Joseph G. & Lambson, Val Eugene, 1986. "Dynamic collusion in an open economy," Economics Letters, Elsevier, vol. 20(1), pages 75-78.
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    Cited by:

    1. Salman Ahmad & Attiya Yasmin Javid, 2015. "Analysing the Price Cost Markup and Its Behaviour over the Business Cycles in Case of Manufacturing Industries of Pakistan," PIDE-Working Papers 2015:117, Pakistan Institute of Development Economics.
    2. Rigoberto A. López & Elena López & Carmen Liron-Espana, 2009. "When is concentration beneficial? Evidence from U.S. manufacturing," Alcamentos 0901, Universidad de Alcalá, Departamento de Economía..
    3. Rigoberto Lopez & Elena Lopez & Carmen Lirón-España, 2014. "Who Benefits from Industrial Concentration? Evidence from U.S. Manufacturing," Journal of Industry, Competition and Trade, Springer, vol. 14(3), pages 303-317, September.
    4. Marsh, John M. & Brester, Gary W., 2004. "Wholesale-Retail Marketing Margin Behavior in the Beef and Pork Industries," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(01), April.

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