Foreign trade elasticities and import discipline

Martha Field and Emilio Pagoulatos

Applied Economics, 1998, vol. 30, issue 1, 105-111

Abstract: This paper provides new evidence on the 'trade-as-discipline7rsquo; hypothesis by considering the determination of price - cost margins with a panel of 41 four-digit US food manufacturing industries from 1972 to 1987. Following the empirical specification suggested by competitive fringe oligopoly models, we include estimated domestic demand elasticities and cross-price elasticities of import demand as explanatory variables, and the empirical results confirm the importance of these variables in assessing the hypothesis.

Date: 1998
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DOI: 10.1080/000368498326191

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