How intense is Competition in International Markets of Traditional goods?

Sergio de Nardis and Cristina Pensa
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Cristina Pensa: CSC- Centro Studi Confindustria

No 45, ISAE Working Papers from ISTAT - Italian National Institute of Statistics - (Rome, ITALY)

Abstract: Italian industry continues to specialise in traditional industries. This is a source of concern for some observers who argue that this kind of specialisation overexpose Italian manufacturing to the competition of low cost producers, especially those located in emerging economies. We verify how intense is the competitive pressure on Italian exporters of traditional goods through a synthetic measure of their market power. We make use of the coincidence of the concept of relative mark up (or Lerner index), as an indicator of market power, with that of elasticity of the residual demand curve. Our findings indicate that assertions as to the excessive exposure of the Italian specialised sectors (textile, apparel, footwear, leather, ceramics, wooden furniture) to the pricing policies of competitors are questionable. Over the period considered (the 80s’ and the 90s’) Italian exporters were able to practice mark ups over marginal cost in most of the products/markets we analysed. Only in a minority of cases Italian exporters showed no market power.

Keywords: market power; specialisation; international competition; export markets. (search for similar items in EconPapers)
JEL-codes: F14 L13 L60 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2004-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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