Pricing to Market at firm level

This paper tries to contribute to the renewed literature about price differences across countries (the so-called border effect). Specifically, it analyzes the reasons underlying changes in relative prices across export/domestic markets for an open economy. The theoretical benchmark, based on the existence of Pricing to Market strategies, also takes into account some hypotheses about the effects of demand variations and market power on prices. The empirical analysis, using firm panel data for the nineties, points out the positive (though small) impact of the exchange rate on the evolution of price ratio. Additionally, the results also suggest a procyclical behavior of prices in both markets, which is positively affected by the degree of competition. Though data do not allow an in-depth analysis, some hypothesis in terms of foreseeable effects of the European Monetary Union on relative prices are provided.

Domestic and foreign price-marginal cost margins: an application to Spanish manufacturing firms

The objective of this paper is to analyse the differences in price-marginal cost margins of the export and domestic markets by the estimation of a multiproduct cost function. We apply this method to a panel of Spanish export manufacturing firms from the period 1990-1997. Some results emerge from the estimations. First, price-marginal cost margins in domestic markets are larger than foreign margins throughout the period. Second, price-marginal cost margins are procyclical in the domestic market but there is no evidence of this behaviour in the foreign markets. Third, there is no evidence that export firms used the devaluation of the currency to increase their margins. Finally, price-cost margins reveal some degree of heterogeneity across industries in both markets.Marginal cost, price-cost margins, translog cost function, export firm

Subsidies or loans? Evaluating the impact of R&D support programmes

The objective of this study is to compare the effect of different types of public direct support for R&D projects on firms’ technological capabilities. We distinguish between low-interest loans and national and European subsidies. Using data on 4,407 Spanish firms during the period 2002-2005, we estimate a multivariate probit to analyse the determinants of firms’ participation in public R&D programmes and, later, the impact of this participation on firms’ R&D activities using two different procedures. Regardless of the methodology employed for the analysis, the results suggest that being awarded any type of direct aid clearly increases the probability of conducting R&D activities. In terms of being supported through a unique instrument, the greatest effect corresponds to the case of European grants, where the impact is more than three times larger than the one of loans. As for R&D intensity, the hypothesis of full crowding-out of private R&D is rejected for all types of support. In addition, we find that the impacts of subsidies and loans reinforce each other when they are jointly awarded to SMEs. However, for large firms we cannot rule out the existence of crowding-out effect be-tween subsidies and loans.Depto. de Análisis Económico y Economía CuantitativaFac. de Ciencias Económicas y EmpresarialesTRUEUnión Europea. FP7Ministerio de Ciencia e Innovación (MICINN)pu

Firms’ growth, size and age: a nonparametric approach

This paper offers empirical evidence of firm failure rates as well as the mean of the distribution of realized growth rates, distinguishing between the sample of non-failing firms and the sample of all firms, failing and non-failing. Attention is directed at identifying a set of characteristics, in particular the size and age of firms, systematically related to the patterns of firm growth and exit, using a panel of Spanish manufacturing firms. The two main contributions of the paper are the use of nonparametric techniques and the analysis of issues ignored in other studies like the regression-to-the-mean bias and the measurement of learning effects. We find evidence that failure rates and the mean growth rate of successful firms decline with size and age. When failing firms are integrated, there are no significant differences in the mean growth rate across the age and size of firms. Regression-to-the-mean does not prove to be a substantial factor behind the negative relationship between size and growth of surviving firms

Diferenciación de producto y actividad exportadora de las empresas manufactureras españolas (1990-1996)

El objetivo de este trabajo es ofrecer información acerca de los efectos vinculados a la diferenciación de producto sobre las exportaciones de las empresas manufactureras españolas en la primera mitad de la década de los noventa. Para ello se hace uso de la información suministrada por la Encuesta Sobre Estrategias Empresariales (ESEE) para el periodo comprendido entre 1990 y 1996. La ESEE constituye una de las escasas fuentes que proporciona información anual de empresas en España. De hecho, sólo las encuestas que el Instituto de Comercio Exterior ha venido realizando proporciona una información comparable para todo el territorio económico

The effect of international trade on mark-ups distribution

This paper presents empirical evidence about the relationship between market openness and markup distribution of manufacturing firms. The empirical analysis uses a panel data set of Spanish firms in the period 1990-2005, with a structural approach to identify individual mark-ups. 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 the recent literature on efficiency heterogeneity and international trade and, in particular, Melitz and Ottaviano (2008)