The effect of international trade on markups distribution
ISSN: 2254-4380
Year of publication: 2013
Volume: 2
Issue: 1
Pages: 33-41
Type: Article
More publications in: Economics and Business Letters
Sustainable development goals
Abstract
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)
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