Antitrust policies and profitability in non-tradable sectors

Timothy Besley, Nicola Fontana and Nicola Limodio

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Firms in tradable sectors are more likely to be subject to external competition to limit market power, while nontradable firms are more dependent on domestic policies and institutions. This paper combines an antitrust index available for multiple countries with firm-level data from Orbis covering more than 12 million firms from 94 countries, including 20 sectors over 10 years and finds that profit margins of firms operating in nontradable sectors are significantly lower in countries with stronger antitrust policies compared to firms operating in tradable sectors. The results are robust to a wide variety of empirical specifications.

Keywords: competition; antitrust; institutions (search for similar items in EconPapers)
JEL-codes: L44 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2021-06-01
New Economics Papers: this item is included in nep-cfn, nep-com, nep-ind and nep-sbm
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Published in American Economic Review: Insights, 1, June, 2021, 3(2), pp. 251 - 265. ISSN: 2640-205X

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http://eprints.lse.ac.uk/106493/ Open access version. (application/pdf)

Related works:
Journal Article: Antitrust Policies and Profitability in Nontradable Sectors (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:106493

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