Impact of Institutions on Cross-Border Price Dispersion

Jiří Schwarz

No 2011/30, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: This paper analyzes the role of institutions in price dispersion among cities in the European region in the 1996-2009 period. An overview of the literature on the border effect reveals that the role of institutions is completely neglected. Using the Worldwide Governance Indicators as explanatory variables I find that the better the institutions, the lower the predicted dispersion. The result is robust to different specifications of the regression model and it is consistent with a hypothesis that arbitrage, as an entrepreneurial activity and the main power behind the law of one price, is influenced by institutional quality.

Keywords: border effect; price dispersion; price convergence; law of one price; institutional quality (search for similar items in EconPapers)
JEL-codes: D23 E31 F41 L26 (search for similar items in EconPapers)
Pages: 24
Date: 2011-09, Revised 2011-09
New Economics Papers: this item is included in nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://ies.fsv.cuni.cz/default/file/download/id/17338 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://ies.fsv.cuni.cz/default/file/download/id/17338 [301 Moved Permanently]--> https://ies.fsv.cuni.cz/default/file/download/id/17338)

Related works:
Journal Article: Impact of institutions on cross-border price dispersion (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2011_30

Access Statistics for this paper

More papers in Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Natalie Svarcova ().