 Economic integration and the dynamics of firms’ competitive behaviorCarlo Altomonte () and Marcella Nicolini Structural Change and Economic Dynamics, 2012, vol. 23, issue 4, 383-402 Abstract: We investigate the evolution of firms’ competitive behavior in the EU by studying the dynamics of firms’ price-cost margins (PCMs) across four countries (France, Italy, Poland and Sweden), in three manufacturing and three services industries for around 170,000 firms over the period 1999–2007. By looking at density distributions of the PCM across firms, we detect an aggregation problem affecting country specific measures of PCM levels, with PCM changes providing instead an unbiased representation of industry dynamics. A Laspeyres-type decomposition of PCM changes shows pro-competitive effects over the period, induced mainly by the reallocation channel, and a tendency to a quality upgrading of firms, revealed by the positive interaction term. These trends are stronger after 2002. We also observe a trend towards lower PCMs across manufacturing industries, while the latter is not true for services. These findings are confirmed by a dynamic panel econometric exercise performed on the pooled firm-level sample. Keywords: Price-cost margin; Kernel density; Laspeyres decomposition; Aggregation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:23:y:2012:i:4:p:383-402 DOI: 10.1016/j.strueco.2011.10.001 Access Statistics for this article Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen More articles in Structural Change and Economic Dynamics from Elsevier |
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