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Imports, Pass-Through, and the Structure of Retail Markets

  • Horst Raff
  • Nicolas Schmitt

We construct a model of trade with heterogeneous retailers to examine the effects of trade liberalization on retail market structure, imports and social welfare. We are especially interested in studying the degree of pass-through of import into retail prices and the effects of retail market regulation. The paper shows that the degree of pass-through may be large when market structure effects are taken into account, and that restrictions on retailing may have significant effects on imports and the degree of pass-through. The paper helps explain the apparent discrepancy between the low observed degree of pass-through and the large benefit that consumers seem to derive from trade liberalization.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2817.

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Date of creation: 2009
Date of revision:
Handle: RePEc:ces:ceswps:_2817
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  1. Ronald S. Jarmin & Shawn D. Klimek & Javier Miranda, 2009. "The Role of Retail Chains: National, Regional and Industry Results," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 237-262 National Bureau of Economic Research, Inc.
  2. Martin Richardson, 2004. "Trade Policy and Access to Retail Distribution," Review of International Economics, Wiley Blackwell, vol. 12(4), pages 676-688, 09.
  3. Ottaviano, Gianmarco & Melitz, Marc, 2008. "Market Size, Trade, and Productivity," Scholarly Articles 3229096, Harvard University Department of Economics.
  4. Javier Miranda & Shawn Klimek & Ron Jarmin, 2004. "Firm Entry and Exit in the U.S. Retail Sector, 1977-1997," Working Papers 04-17, Center for Economic Studies, U.S. Census Bureau.
  5. Eckel, Carsten, 2009. "International trade and retailing," BERG Working Paper Series 63, Bamberg University, Bamberg Economic Research Group.
  6. Horst Raff & Nicolas Schmitt, 2008. "Buyer Power in International Markets," Kiel Working Papers 1431, Kiel Institute for the World Economy.
  7. Fabiano Schivardi & Eliana Viviano, 2010. "Entry Barriers in Retail Trade," Working Papers CELEG 1003, Dipartimento di Economia e Finanza, LUISS Guido Carli.
  8. Miyagiwa, K., 1991. "Reforming the Japanese Distribution System: Will it Boost Imports to Japan?," Working Papers 91-04, University of Washington, Department of Economics.
  9. Joseph Francois & Ian Wooton, 2008. "Market Structure and Market Access," CESifo Working Paper Series 2239, CESifo Group Munich.
  10. Beata Javorcik & Wolfgang Keller & James Tybout, 2008. "Openness and Industrial Response in a Wal-Mart World: A Case Study of Mexican Soaps, Detergents and Surfactant Producers," The World Economy, Wiley Blackwell, vol. 31(12), pages 1558-1580, December.
  11. Linda S. Goldberg & José Manuel Campa, 2006. "Distribution Margins, Imported Inputs, and the Sensitivity of the CPI to Exchange Rates," NBER Working Papers 12121, National Bureau of Economic Research, Inc.
  12. Emek Basker & Pham Hoang Van, 2007. "Wal-Mart as Catalyst to U.S.-China Trade," Working Papers 0710, Department of Economics, University of Missouri.
  13. Richard E. Caves, 1998. "Industrial Organization and New Findings on the Turnover and Mobility of Firms," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1947-1982, December.
  14. Haskel, Jonathan & Sadun, Raffaella, 2009. "Regulation and UK Retailing Productivity: Evidence from Micro Data," CEPR Discussion Papers 7140, C.E.P.R. Discussion Papers.
  15. repec:oup:qjecon:v:117:y:2002:i:4:p:1369-1413 is not listed on IDEAS
  16. Hellerstein, Rebecca, 2008. "Who bears the cost of a change in the exchange rate? Pass-through accounting for the case of beer," Journal of International Economics, Elsevier, vol. 76(1), pages 14-32, September.
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