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Imperfect Competition in Firm-to-Firm Trade

Emmanuel Dhyne (), Glenn Magerman () and Ayumu Ken kikkawa

No 2019-05, Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: This paper studies the implications of imperfect competition in firm-to-firm trade. Using a dataset on all transactions between Belgian firms, we find that firms charge higher markups if they have higher input shares among their buyers. We build a model where firms charge different markups to buyers depending on the input shares they have in each buyer. The estimated model suggests large distortions due to double marginalization: Reducing all markups in firm-to-firm also highlight the importance of accounting for endogeneities in firm-to-firm markups in predicting the effects of shock transmissions.

Keywords: Competition; Firm-to-Firm Trade (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-ind
Date: 2019-01
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