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Markups, bargaining power and offshoring: An empirical assessment

  • Lourdes Moreno

    (Universidad Complutense de Madrid and GRIPICO)

  • Diego Rodríguez

    (Universidad Complutense de Madrid and GRIPICO)

This paper tests the pro-competitive effect of imports on product and labour markets for Spanish manufacturing firms in the period 1990-2005. In doing so, it takes into account the type of imported products: final vs intermediate. Markups are estimated following the procedure suggested by Roeger (1995) and including an efficient bargaining model. The observed heterogeneity among firms is parameterized to consider additional product standardization and market concentration. The results support the Imports as Market Discipline hypothesis for importers of final goods, while firms that offshore intermediate inputs show similar markups to non-importers. Additionally, the union bargaining power is smaller the more final-goods oriented imports are and the more homogeneous is the type of goods elaborated by firms.

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Paper provided by Asociación Española de Economía y Finanzas Internacionales in its series Working Papers with number 10-05.

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Length: 40 pages
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:aee:wpaper:1005
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