Markups, Entry Regulation, and Trade : Does Country Size Matter?
Actual, and potential competition is a powerful source of discipline on the pricing behavior of firms with market power. The authors develop a simple model that shows that the effects of new entry, and import competition on industry price-cost mark...
| Main Authors: | , , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/08/1570689/markups-entry-regulation-trade-country-size-matter http://hdl.handle.net/10986/19563 |
| id |
okr-10986-19563 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-195632021-04-23T14:03:43Z Markups, Entry Regulation, and Trade : Does Country Size Matter? Hoekman, Bernard Kee, Hiau Looi Olarreaga, Marcelo ACCOUNTING ANALYSIS OF VARIANCE BARRIERS TO ENTRY BARRIERS TO IMPORTS BUDGET CONSTRAINTS CAPITALIZATION COMPETITION LAW COMPETITION POLICY COMPETITIVE EFFECTS CONSTANT RETURNS TO SCALE CONSTRUCTION COST OF CAPITAL CROSS-COUNTRY REGRESSION DEMAND ELASTICITY DEVELOPED COUNTRIES DOMESTIC COMPETITION DOMESTIC ECONOMY DOMESTIC FIRMS DOMESTIC MARKET DOMESTIC MARKETS ECONOMIC DEVELOPMENT ECONOMICS RESEARCH ELASTICITIES EQUILIBRIUM FINANCIAL DEEPENING FINANCIAL SECTOR FOREIGN COMPETITION FOREIGN ENTRY FOREIGN FIRM FOREIGN FIRMS GDP GDP PER CAPITA GROWTH RATE IMPORT COMPETITION IMPORT PENETRATION IMPORTS INSTITUTIONAL DEVELOPMENT INTELLECTUAL PROPERTY INTERMEDIATE INPUTS INTERNATIONAL AGREEMENTS INTERNATIONAL MARKETS LEGAL REGIMES LEGISLATION M2 MARGINAL COST MARGINAL COST OF PRODUCTION MARGINAL COSTS MARGINAL EFFECT MARKET DISCIPLINE MARKET POWER MARKET SIZE NATIONAL COMPETITION NATIONAL COMPETITION POLICY NATIONAL LAWS OPEN ECONOMIES OPEN TRADE POLICY REGIMES PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTION TECHNOLOGY PRODUCTIVITY PRODUCTIVITY GROWTH PROFIT MAXIMIZATION PROFITABILITY PROPERTY RIGHTS REMOVING BARRIERS STANDARD ERRORS TECHNOLOGICAL PROGRESS TIME SERIES TOTAL COSTS TOTAL REVENUE TRADE LIBERALIZATION TRANSACTION COSTS TRANSACTIONS COSTS VALUE ADDED Actual, and potential competition is a powerful source of discipline on the pricing behavior of firms with market power. The authors develop a simple model that shows that the effects of new entry, and import competition on industry price-cost markups, depend on country size. The authors predicted that barriers to domestic entry would have a stronger anti-competitive effect in large countries, while barriers to foreign entry (imports) would have a stronger effect in small countries. After estimating markups for manufacturing sectors in forty-one industrial, and developing countries, they test these hypotheses, and find that the hypotheses cannot be rejected by the data. For example, although Indonesia, and Italy impose the same number of regulations on the entry of new firms, the effect of the regulations on manufacturing markups is twenty percent greater in Italy because of its larger size. Similarly, while Chile and Zimbabwe have the same import penetration ration, the market discipline effect of imports is thirteen percent greater in Zimbabwe because of its smaller size. 2014-08-21T17:27:40Z 2014-08-21T17:27:40Z 2001-08 http://documents.worldbank.org/curated/en/2001/08/1570689/markups-entry-regulation-trade-country-size-matter http://hdl.handle.net/10986/19563 English en_US Policy Research Working Paper;No. 2662 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ANALYSIS OF VARIANCE BARRIERS TO ENTRY BARRIERS TO IMPORTS BUDGET CONSTRAINTS CAPITALIZATION COMPETITION LAW COMPETITION POLICY COMPETITIVE EFFECTS CONSTANT RETURNS TO SCALE CONSTRUCTION COST OF CAPITAL CROSS-COUNTRY REGRESSION DEMAND ELASTICITY DEVELOPED COUNTRIES DOMESTIC COMPETITION DOMESTIC ECONOMY DOMESTIC FIRMS DOMESTIC MARKET DOMESTIC MARKETS ECONOMIC DEVELOPMENT ECONOMICS RESEARCH ELASTICITIES EQUILIBRIUM FINANCIAL DEEPENING FINANCIAL SECTOR FOREIGN COMPETITION FOREIGN ENTRY FOREIGN FIRM FOREIGN FIRMS GDP GDP PER CAPITA GROWTH RATE IMPORT COMPETITION IMPORT PENETRATION IMPORTS INSTITUTIONAL DEVELOPMENT INTELLECTUAL PROPERTY INTERMEDIATE INPUTS INTERNATIONAL AGREEMENTS INTERNATIONAL MARKETS LEGAL REGIMES LEGISLATION M2 MARGINAL COST MARGINAL COST OF PRODUCTION MARGINAL COSTS MARGINAL EFFECT MARKET DISCIPLINE MARKET POWER MARKET SIZE NATIONAL COMPETITION NATIONAL COMPETITION POLICY NATIONAL LAWS OPEN ECONOMIES OPEN TRADE POLICY REGIMES PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTION TECHNOLOGY PRODUCTIVITY PRODUCTIVITY GROWTH PROFIT MAXIMIZATION PROFITABILITY PROPERTY RIGHTS REMOVING BARRIERS STANDARD ERRORS TECHNOLOGICAL PROGRESS TIME SERIES TOTAL COSTS TOTAL REVENUE TRADE LIBERALIZATION TRANSACTION COSTS TRANSACTIONS COSTS VALUE ADDED |
| spellingShingle |
ACCOUNTING ANALYSIS OF VARIANCE BARRIERS TO ENTRY BARRIERS TO IMPORTS BUDGET CONSTRAINTS CAPITALIZATION COMPETITION LAW COMPETITION POLICY COMPETITIVE EFFECTS CONSTANT RETURNS TO SCALE CONSTRUCTION COST OF CAPITAL CROSS-COUNTRY REGRESSION DEMAND ELASTICITY DEVELOPED COUNTRIES DOMESTIC COMPETITION DOMESTIC ECONOMY DOMESTIC FIRMS DOMESTIC MARKET DOMESTIC MARKETS ECONOMIC DEVELOPMENT ECONOMICS RESEARCH ELASTICITIES EQUILIBRIUM FINANCIAL DEEPENING FINANCIAL SECTOR FOREIGN COMPETITION FOREIGN ENTRY FOREIGN FIRM FOREIGN FIRMS GDP GDP PER CAPITA GROWTH RATE IMPORT COMPETITION IMPORT PENETRATION IMPORTS INSTITUTIONAL DEVELOPMENT INTELLECTUAL PROPERTY INTERMEDIATE INPUTS INTERNATIONAL AGREEMENTS INTERNATIONAL MARKETS LEGAL REGIMES LEGISLATION M2 MARGINAL COST MARGINAL COST OF PRODUCTION MARGINAL COSTS MARGINAL EFFECT MARKET DISCIPLINE MARKET POWER MARKET SIZE NATIONAL COMPETITION NATIONAL COMPETITION POLICY NATIONAL LAWS OPEN ECONOMIES OPEN TRADE POLICY REGIMES PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTION TECHNOLOGY PRODUCTIVITY PRODUCTIVITY GROWTH PROFIT MAXIMIZATION PROFITABILITY PROPERTY RIGHTS REMOVING BARRIERS STANDARD ERRORS TECHNOLOGICAL PROGRESS TIME SERIES TOTAL COSTS TOTAL REVENUE TRADE LIBERALIZATION TRANSACTION COSTS TRANSACTIONS COSTS VALUE ADDED Hoekman, Bernard Kee, Hiau Looi Olarreaga, Marcelo Markups, Entry Regulation, and Trade : Does Country Size Matter? |
| relation |
Policy Research Working Paper;No. 2662 |
| description |
Actual, and potential competition is a
powerful source of discipline on the pricing behavior of
firms with market power. The authors develop a simple model
that shows that the effects of new entry, and import
competition on industry price-cost markups, depend on
country size. The authors predicted that barriers to
domestic entry would have a stronger anti-competitive effect
in large countries, while barriers to foreign entry
(imports) would have a stronger effect in small countries.
After estimating markups for manufacturing sectors in
forty-one industrial, and developing countries, they test
these hypotheses, and find that the hypotheses cannot be
rejected by the data. For example, although Indonesia, and
Italy impose the same number of regulations on the entry of
new firms, the effect of the regulations on manufacturing
markups is twenty percent greater in Italy because of its
larger size. Similarly, while Chile and Zimbabwe have the
same import penetration ration, the market discipline effect
of imports is thirteen percent greater in Zimbabwe because
of its smaller size. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Hoekman, Bernard Kee, Hiau Looi Olarreaga, Marcelo |
| author_facet |
Hoekman, Bernard Kee, Hiau Looi Olarreaga, Marcelo |
| author_sort |
Hoekman, Bernard |
| title |
Markups, Entry Regulation, and Trade : Does Country Size Matter? |
| title_short |
Markups, Entry Regulation, and Trade : Does Country Size Matter? |
| title_full |
Markups, Entry Regulation, and Trade : Does Country Size Matter? |
| title_fullStr |
Markups, Entry Regulation, and Trade : Does Country Size Matter? |
| title_full_unstemmed |
Markups, Entry Regulation, and Trade : Does Country Size Matter? |
| title_sort |
markups, entry regulation, and trade : does country size matter? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2001/08/1570689/markups-entry-regulation-trade-country-size-matter http://hdl.handle.net/10986/19563 |
| _version_ |
1764440012049350656 |