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Trade Policy and Market Power: Firm-Level Evidence
- Source :
- International Economic Review, International Economic Review, Wiley, 2019, 60 (4), pp.1647-1673. ⟨10.1111/iere.12409⟩, International Economic Review, 2019, 60 (4), pp.1647-1673. ⟨10.1111/iere.12409⟩
- Publication Year :
- 2019
- Publisher :
- HAL CCSD, 2019.
-
Abstract
- This paper identifies the effect of trade policy on market power through new data and a new identification strategy. It uses a large data set containing export values and quantities by product and destination for all exporting firms in 12 developing and emerging countries over several years, merged with destination-product-specific information on tariffs and non-tariff barriers. Market power is identified by observing how exporting firms price discriminate across markets in reaction to variations in bilateral exchange rates. Pricing-to-market is prevalent in all regions of the sample, even among small firms, although it is increasing in firm size, in accordance with theory. More importantly, the effect of non-tariff measures is not isomorphic to that of tariffs: the observed pricing-to-market behavior suggests that, although tariffs reduce the market power of foreign firms through classic rent-shifting effects, non-tariff measures alter market structure and reinforce the market power of non-exiting firms, domestic and foreign ones alike.
- Subjects :
- Economics and Econometrics
MARKET POWER
JEL: D - Microeconomics/D.D4 - Market Structure, Pricing, and Design/D.D4.D40 - General
tariffs
PRICE DISCRIMINATION
Sample (statistics)
Price discrimination
exchange rate
EXCHANGE RATES
price discrimination
Market structure
Exchange rate
EXPORT FIRMS
0502 economics and business
ddc:330
Economics
F12
Market power
F13
050207 economics
Emerging market economies
[SHS.ECO] Humanities and Social Sciences/Economics and Finance
Emerging markets
JEL: F - International Economics/F.F1 - Trade/F.F1.F12 - Models of Trade with Imperfect Competition and Scale Economies • Fragmentation
EMERGING MARKET ECONOMIES
F31
050205 econometrics
Commercial policy
F14
JEL: F - International Economics/F.F1 - Trade/F.F1.F14 - Empirical Studies of Trade
05 social sciences
JEL: F - International Economics/F.F3 - International Finance/F.F3.F31 - Foreign Exchange
TARIFFS
International economics
NON-TARIFF BARRIERS
[SHS.ECO]Humanities and Social Sciences/Economics and Finance
Identification (information)
non-tariff measures
D40
trade policy
JEL: F - International Economics/F.F1 - Trade/F.F1.F13 - Trade Policy • International Trade Organizations
Business
TRADE POLICY
Subjects
Details
- Language :
- English
- ISSN :
- 00206598 and 14682354
- Database :
- OpenAIRE
- Journal :
- International Economic Review, International Economic Review, Wiley, 2019, 60 (4), pp.1647-1673. ⟨10.1111/iere.12409⟩, International Economic Review, 2019, 60 (4), pp.1647-1673. ⟨10.1111/iere.12409⟩
- Accession number :
- edsair.doi.dedup.....9a058eecc5155b47993c96fb7c0b7d50