OPENNESS TO TRADE AND INDUSTRY COST DISPERSION: EVIDENCE FROM A PANEL OF ITALIAN FIRMS*

Massimo Del Gatto, Gianmarco Ottaviano and Marcello Pagnini ()

Journal of Regional Science, 2008, vol. 48, issue 1, 97-129

Abstract: ABSTRACT We use Italian firm‐level data to investigate the impact of trade openness on the distribution of firms across marginal cost levels. In so doing, we implement a procedure that allows us to control not only for the standard transmission bias identified in firm‐level TFP regressions but also for the omitted price bias due to imperfect competition. We find that more open industries are characterized by a smaller dispersion of costs across active firms. Moreover, in those industries the average cost is also smaller.

Date: 2008
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Citations: View citations in EconPapers (61)

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https://doi.org/10.1111/j.1467-9787.2008.00546.x

Related works:
Working Paper: Openess to trade and industry cost dispersion: Evidence from a panel of Italian firms (2007)
Working Paper: Openness to Trade and Industry Cost Dispersion: Evidence from a Panel of Italian Firms (2007)
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