The Impact of Imports on Price-Cost Margins: An Empirical Illustration

Rigoberto Lopez and Elena Lopez

No 61, Food Marketing Policy Center Research Reports from University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy

Abstract: This article decomposes the impact of imports on domestic price-cost margins into separate price and cost effects. Using data from 24 food-processing industries, the empirical results show that although the direct impact of imports on prices is always negative, a positive net impact on price-cost margins occurs in industries characterized by low own-price elasticity of demand and diseconomies of scale. Further results show that the disciplining effect of imports is more preponderant the lower the degree of domestic competition.

Keywords: Market power; imports; market structure; international trade; food industry; Agribusiness; Demand and Price Analysis; International Relations/Trade (search for similar items in EconPapers)
Date: 2001
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Related works:
Journal Article: The impact of imports on price-cost margins: An empirical illustration (2003)
Working Paper: The Impact of Imports on Price-Cost Margins: An Empirical Illustration (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:zwi:fpcrep:061

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