Price-cost Margins and Economic Integration: How Important is the Pro-competitive Effect?

Oscar Bajo-Rubio (), Carmen Diaz-Roldan and Antonio Gómez-Plana

The World Economy, 2015, vol. 38, issue 5, 893-898

Abstract: type="main" xml:id="twec12245-abs-0001">

In this paper, we examine whether the so-called pro-competitive effect holds when two countries integrate by forming a common market. We propose a general framework of reference, where the price-cost margin of domestic firms depends on a set of variables in addition to trade costs with the partner country, which might eventually offset the conventional result.

Date: 2015
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Related works:
Working Paper: Price-Cost Margins and Economic Integration: How Important is the Pro-Competitive Effect? (2004)
Working Paper: Price-cost margins and economic integration: How important is the pro-competitive effect? (2004)
Working Paper: Price-Cost Margins and Economic Integration: How Important is the Pro-Competitive Effect?
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