Price-cost margins and economic integration: How important is the pro-competitive effect?
In this paper we examine whether the conventional result of a greater degree of integration leading to lower price-cost margins (i.e., the pro-competitive effect), would hold when two countries integrate by forming a common market. We propose a general framework of reference, in order to assess the extent of the pro-competitive effect when the role of other variables is allowed for, both for a “small” and “large” common market. By solving the model, the price-cost margin of domestic firms would depend on a set of variables in addition to trade costs with the partner country, which might eventually offset the conventional result.
|Date of creation:||2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (34) 955 055 210
Fax: (34) 955 055 211
Web page: http://www.centrodeestudiosandaluces.es
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Oscar Bajo Rubio & Carmen Díaz-Roldán, .
"A General Framework for the Macroeconomic Analysis of Monetary Unions,"
Working Papers on International Economics and Finance
- Oscar Bajo-Rubio & Carmen Díaz-Roldán, 2001. "A General Framework For The Macroeconomic Analysis Of Monetary Unions," Working Papers 01-06, Asociación Española de Economía y Finanzas Internacionales.
- Óscar Bajo Rubio & Carmen Díaz Roldán, 2001. "A General Framework For The Macroeconomic Analysis Of Monetary Unions," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 0101, Departamento de Economía - Universidad Pública de Navarra.
- Haaland, J.I. & Wooton, I., 1991.
"Market Integration, Competition, and Welfare,"
499, Stockholm - International Economic Studies.
- Bottasso, Anna & Sembenelli, Alessandro, 2001. "Market power, productivity and the EU Single Market Program: Evidence from a panel of Italian firms," European Economic Review, Elsevier, vol. 45(1), pages 167-186, January.
- Markusen, James R. & Venables, Anthony J., 1999.
"Foreign direct investment as a catalyst for industrial development,"
European Economic Review,
Elsevier, vol. 43(2), pages 335-356, February.
- James R. Markusen & Anthony J. Venables, 1997. "Foreign Direct Investment as a Catalyst for Industrial Development," NBER Working Papers 6241, National Bureau of Economic Research, Inc.
- Francis E. Warnock, 1998. "Idiosyncratic tastes in a two-country optimizing model: implications ; of a standard presumption," International Finance Discussion Papers 631, Board of Governors of the Federal Reserve System (U.S.).
- Dixit, Avinash K & Stiglitz, Joseph E, 1975.
"Monopolistic Competition and Optimum Product Diversity,"
The Warwick Economics Research Paper Series (TWERPS)
64, University of Warwick, Department of Economics.
- Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
- Harry Flam, 1992. "Product Markets and 1992: Full Integration, Large Gains?," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 7-30, Fall.
- Baldwin, Richard E. & Venables, Anthony J., 1995. "Regional economic integration," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 31, pages 1597-1644 Elsevier.
- Chris Allen & Michael Gasiorek & Alasdair Smith, 1998. "The competition effects of the Single Market in Europe," Economic Policy, CEPR;CES;MSH, vol. 13(27), pages 439-486, October.
When requesting a correction, please mention this item's handle: RePEc:cea:doctra:e2004_62. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Teresa Rodríguez)
If references are entirely missing, you can add them using this form.