Markups, bargaining power and offshoring: An empirical assessment

This paper tests the pro-competitive effect of imports on product and labour markets for Spanish manufacturing firms in the period 1990-2005. In doing so, it takes into account the type of imported products: final vs intermediate. Markups are estimated following the procedure suggested by Roeger (1995) and including an efficient bargaining model. The observed heterogeneity among firms is parameterized to consider additional product standardization and market concentration. The results support the Imports as Market Discipline hypothesis for importers of final goods, while firms that offshore intermediate inputs show similar markups to non-importers. Additionally, the union bargaining power is smaller the more final-goods oriented imports are and the more homogeneous is the type of goods elaborated by firms.Markups, Offshoring, Bargaining power.

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

Domestic and Foreign Price-Marginal Cost Margins: An Application to Spanish Manufacturing Firms

This paper investigates the differences in margins of export and domestic markets for Spanish manufacturing firms in the period 1990-1997. We estimate jointly a multiproduct cost function, a variable factor share equation and two price-marginal cost margin equations. The results obtained indicate that the marginal cost of production sold in export markets is slightly greater than in domestic markets. At the same time, the price-marginal cost margins in export markets are smaller than in domestic markets. We also find strong evidence that margins are procyclical in the domestic markets, but this evidence is less clear in the foreign markets

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)

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