The impact of imports on price-cost margins: An empirical illustration
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
Volume (Year): 28 (2003)
Issue (Month): 2 (04)
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