Market Structure: Concentration and Imports as Determinants of Industry Margins

Alejandro Castañeda Sabido and David Mulato
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Alejandro Castañeda Sabido: El Colegio de México
David Mulato: Universidad Torcuato di Tella
Authors registered in the RePEc Author Service: Alejandro Castañeda

Estudios Económicos, 2006, vol. 21, issue 2, 177-202

Abstract: The paper analyzes the determinants of price-cost margins following traditional industrial organization approaches. The price-cost margins are made function of the concentration index, and the degree of import penetration. We find that imports act as a market disciplining device that reduces the price-cost margins of the domestic industry. After trade liberalization, the impact of concentration diminishes. Controlling for cyclical behavior of the price-cost margins the paper shows that cross-section studies tend to bias the estimates. A distinction between durables and non-durables is made, finding strong evidence for concentration to affect the price-cost margins of durables.

Keywords: price-cost margins; import penetration; concentration; cyclical effects (search for similar items in EconPapers)
JEL-codes: L00 L11 L60 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:emx:esteco:v:21:y:2006:i:2:p:177-202

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