The effect of international trade on markups distribution
This paper presents empirical evidence about the relationship between market openness and markup distribution of manufacturing firms. The results point out that tougher competition associated to openness reduces 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 across industries is weaker. These results partially support the theoretical predictions by Melitz and Ottaviano (2008)
Bernstein, J. and Mohnen, P. (1991) Price-cost margins, exports and productivity growth: with an application to Canadian industries, Canadian Journal of Economics, 24, 638-659.
Bellone, F., Musso, P., Nesta, L. and Warzynski, F. (2012) Productivity, trade and endogenous mark-ups: testing some micro-level implications of the Melitz-Ottaviano model, mimeo.
Chen, N., Imbs, J. and Scott, A. (2009) The dynamics of trade and competition, Journal of International Economics, 77(1), 50-62.
De Loecker, J. and Warzynski, F. (2012) Markups and firm-level export status, American Economic Review, 102(6), 2437-2471.
Feenstra, R. and Weinstein, D. (2010) Globalization, markups and the U.S. price level, Working Paper 15479, NBER.
Melitz, M.J. (2003) The impact of trade on intra-industry reallocations and aggregate industry productivity, Econometrica, 71(6), 1695-1725.
Melitz, M. J. and Ottaviano, G.I.P. (2008) Market size, trade and productivity, The Review of Economic Studies, 75, 295-316.
Moreno, L. and Rodríguez, D. (2010) Export activity, persistence and mark-ups, Applied Economics, 42, 475-488.
Ottaviano, G.I.P., Tabuchi, T. and Thisse, J.F. (2002) Agglomeration and trade revisited, International Economic Review, 43, 409-436.
Roeger, W. (1995) Can imperfect competition explain the difference between primal and dual productivity measures? Estimates for U.S. Manufacturing”, Journal of Political Economy, 103(2), 316-330.
How to Cite
The works published in this journal are subject to the following terms:
1. Oviedo University Press (the publisher) retains the property rights (copyright) of published works, and encourages and enables the reuse of the same under the license specified in paragraph 2.
© Ediuno. Ediciones de la Universidad de Oviedo / Oviedo University Press
2. The works are published in the online edition of the journal under a Creative Commons Attribution-Non Commercial-Non Derives 3.0 Spain (legal text). You can copy, use, distribute, transmit and publicly display, provided that: i) you cite the author and the original source of publication (journal, publisher and URL of the work), ii) they are not used for commercial purposes, iii) mentions the existence and specifications of this license.
3. Conditions of self-archiving. The author can archive the post-print version of the article (publisher’s version) on the author’s personal website and/or on the web of the institution where he belong, including a link to the page of the journal and putting the way of citation of the work. Economics and Business Letters and its URL https://reunido.uniovi.es/index.php/EBL/index are the only authorized source for correctly giving the reference of the publisher’s version in every mention of the article.