Trade Policy and Market Power: Firm-level Evidence

Alan Asprilla (), Nicolas Berman (), Olivier Cadot and Melise Jaud ()
Additional contact information
Alan Asprilla: University of Lausanne

No 1848, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: This paper identifies the effect of trade policy on market power through new data and a new identification strategy. We use a large dataset containing export values and quantities by product and destination for all exporting firms in 12 developing and emerging countries over several years, merged with destination-product specific information on tariffs and non-tariff barriers. We identify market power by observing how exporting firms price discriminate across markets in reaction to variations in bilateral exchange rates. Pricing-to-market is prevalent in all regions of our sample, even among small firms, although it is increasing in firm size, in accordance with theory. More importantly, we find that the effect of non-tariff measures is not isomorphic to that of tariffs: the pricing-to-market behavior we observe suggests that, while tariffs reduce the market power of foreign firms through classic rent-shifting effects, non-tariff measures alter market structure and reinforce the market power of non-exiting firms, domestic and foreign ones alike.

Keywords: trade policy; non-tariff measures; tariffs; exchange rate; price discrimination (search for similar items in EconPapers)
JEL-codes: D40 F12 F13 F14 F31 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2018-12
New Economics Papers: this item is included in nep-int
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.amse-aixmarseille.fr/sites/default/fil ... /wp_2018_-_nr_48.pdf (application/pdf)

Related works:
Journal Article: TRADE POLICY AND MARKET POWER: FIRM‐LEVEL EVIDENCE (2019)
Working Paper: Trade Policy and Market Power: Firm-Level Evidence (2019)
Working Paper: Trade Policy and Market Power: Firm-Level Evidence (2019)
Working Paper: Trade Policy and Market Power: Firm-level Evidence (2018)
Working Paper: Trade Policy and Market Power: Firm-level Evidence (2016)
Working Paper: Trade Policy and Market Power: Firm-level Evidence (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aim:wpaimx:1848

Access Statistics for this paper

More papers in AMSE Working Papers from Aix-Marseille School of Economics, France AMU-AMSE - 5-9 Boulevard Maurice Bourdet, CS 50498 - 13205 Marseille Cedex 1. Contact information at EDIRC.
Bibliographic data for series maintained by Gregory Cornu ().