The effect of international trade on mark-ups distribution

Lourdes Moreno and D Rodríguez
Authors registered in the RePEc Author Service: Diego Rodriguez Rodriguez () and Dustin Tahisin Gómez Rodríguez, Sr. ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper presents empirical evidence about the relationship between market openness and markup distribution of manufacturing firms. The empirical analysis uses a panel data set of Spanish firms in the period 1990-2005, with a structural approach that lets us to identify individual mark-ups. The results point out that tougher competition associated to openness reduces the average of marginal costs and prices, while it increases the average firm size. However, the evidence about the effect on average markups and the dispersion of performance variables is weaker. These results partially support the theoretical predictions by the recent literature on efficiency heterogeneity and international trade and, in particular, Melitz and Ottaviano (2008).

Keywords: markups; marginal costs; size; openness (search for similar items in EconPapers)
JEL-codes: F12 L60 (search for similar items in EconPapers)
Date: 2009
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Related works:
Journal Article: The effect of international trade on markups distribution (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:22652

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