Why haven't price-cost margins decreased with globalization?

Herve Boulhol

Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)

Abstract: This study analyzes the determinants of price-cost margins (PCMs) for OECD countries between 1970-2003. The main objective is to quantify the pro-competitive effect of international trade and understand why, despite trade liberalization, PCMs have not fallen overall. An increase of one percentage point in the import penetration ratio is estimated to lower the PCM by around 0,005: on average, imports contributed to a large decrease of 0,042 in the PCM. In addition, domestic product market deregulation has reduced PCMs. However, these effects are countervailed by the impacts of exports, financial deepening and disinflation. Union participation seems negatively related to PCMs

Keywords: Price-cost margin; pro-competitive effect; wage bargaining; dynamic panel (search for similar items in EconPapers)
JEL-codes: F12 F16 J50 L11 L13 L60 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2005-08
New Economics Papers: this item is included in nep-com and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://halshs.archives-ouvertes.fr/halshs-00084267 (application/pdf)

Related works:
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:mse:wpsorb:bla06007

Access Statistics for this paper

More papers in Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1) Contact information at EDIRC.
Bibliographic data for series maintained by Lucie Label ().