Price discrimination and market power in export markets: The case of the ceramic tile industry.

This paper combines the pricing-to-market equation and the residual demand elasticity equation to measure the extent of competition in the export markets of ceramic tiles, which has been dominated by Italian and Spanish producers since the late eighties. The findings show that the tile exporters enjoyed substantial market power over the period 1988-1998, and limited evidence that the export market has become more competitive over time.price discrimination, market power, export markets, ceramic tile industry

The impact of exchange rate fluctuations on profit margins: The UK car market, 1971-2002

We investigate the impact on profit margins of exchange rate fluctuations in order to examine optimal pricing policy by source countries in the UK car market. We first estimate a nested logit demand model of new cars to calculate model-specific profit margins. Next we use these estimates to analyse the pricing-to-market (PTM) behaviour of car importers and local producers. The results show that: (1) profit margins fell over the period 1971-2002 as the UK car market moved from being a concentrated market to a looser oligopoly structure; (2) there is a positive association between exchange rate changes and mark-up adjustments of imported cars. Following a 10% pound depreciation, exporters’ profit margins declined by up to 4% and local producers’ profit margins increased by up to 2%; (3) PTM behaviour is asymmetric between appreciations and depreciations in bilateral exchange rates.exchange rates, markup adjustment, pricing to market, cars

The micro foundations of export behaviour: Empirical investigations.

This dissertation presents the results of an empirical investigation into the nature, causes and consequences of the export activity from the point of view of the firm. It comprises five essays, analysing the following topics: Chapter 1 investigates the dynamics of export behaviour among British small and medium sized firms (SMEs) in the nineties. We develop a dynamic model of entry decision in a foreign market that takes into account both unobserved firm heterogeneity and genuine state dependence. After controlling for unobservable firm heterogeneity, we find that up to 75 percent of export persistence in the data is explained by "true" state dependence, and that this dependence is greater among old companies than young companies. Moreover, observable firm characteristics such as size and ownership play a significant role in distinguishing exporters from non-exporters. Chapter 2 reports the results of an empirical investigation of the determinants of export diversification among Spanish exporters. The lack of theory, the unclear past empirical evidence and the use of the census of Spanish exporting firms justifies the use of semi-parametric regression techniques to characterise the pattern of export diversification as a firm becomes more internationalised. Unlike other studies, the finding suggests that the success of strong export-orientated firms relies heavily on both product and market specialisation. Chapter 3 analyses the role of information spillovers in the export destination decision by SMEs. With uncertainty and sunk entry costs, small firms will tend to export to countries where other local exporters have previous experience as information is cheaper and more reliable. In our application for Spain, the findings suggest that geographical agglomeration of exporting firms of the same industry selling to one destination significantly affects the probability of small-medium sized firms exporting to the same destination. The probability to export to one particular destination is also (positively) affected by firm characteristics such as size and export intensity, and gravitational factors such as the level of development and the physical proximity of the destination country. Chapter 4 examines the measurement of market power in an international duopoly market, the ceramic tile industry, over the period 1988-1998. After estimating the marginal costs of each competitor export group, we use both cross-section and time- series techniques to evaluate the degree of competition in this industry. The results suggest that Italian producers are ''leaders" and Spanish producers are ''followers" in a market characterised by substantial positive Chapter 5 investigates the relationship between export activity and technical efficiency using a large panel of firms in the UK manufacturing industry during the nineties. The findings show a positive impact of export status on long-run efficiency among those industries in which the UK reveals a comparative disadvantage, suggesting the important role played by firm competitiveness to overcome industry comparative disadvantage factors. In our analysis of short run efficiency changes, we do not find evidence that efficiency improves as firms become export dependent, markups

¿Por qué el modelo de dotaciones factoriales no es capaz de explicar la localización de la producción de las provincias españolas?

Este trabajo examina la relación entre dotaciones factoriales y patrón de producción con datos de provincias españolas. Los resultados indican un alto grado de indeterminación en la producción utilizando el modelo de dotaciones factoriales. Dos explicaciones son consistentes con este resultado: 1) los bajos costes de transporte en las actividades de manufacturas dentro de un país magnifican la indeterminación de la producción; 2) la presencia de externalidades geográficas en algunas regiones magnifica la indeterminación de la producció[email protected]

Welfare gains from imported varieties in Spain, 1988-2006

This paper investigates the welfare gains due to Spanish imports of new varieties over the period 1988-2006 using the methodology proposed by Feenstra (1994) and Broda and Weinstein (2006). After calculating the elasticities of substitution of a large number of Spanish imported products, we estimate that the total welfare gain due to imports of new varieties in Spain is equal to 1.2% of GDP in 2006 (a very conservative estimate). Next we decompose the contribution of each country to the total welfare gain. By countries, China accounts for about 12% of the total gain, almost the same as the entire EU-15. Este trabajo calcula las ganancias de bienestar generadas por la importación de nuevas variedades en España desde 1988 hasta 2006, utilizando la metodología propuesta originalmente por Feenstra (1994) y mejorada por Broda and Weinstein (2006). Después de calcular las elasticidades de substitución para más de 4500 categorías de productos importados, estimamos que la ganancia total de bienestar por importación de nuevas variedades en España equivale al 1,2% del PIB en 2006 (basado en una estimación muy conservadora). A continuación calculamos la contribución que cada país ha tenido a dicha mejora de bienestar: China acumula el 12% de la ganancia total, casi el mismo porcentaje que el conjunto de la UE-15.welfare gains from trade, trade in variety, Spain.

Is the border effect an artefact of geographic aggregation?

The existence of a large border effect is considered as one of the main puzzles of international macroeconomics. We show that the border effect is, to a large extent, an artefact of geographic concentration. In order to do so we combine international flows with intra-national flows data characterised by a high geographic grid. At this fine grid, intra-national flows are highly localised and dropping sharply with distance. The use of a small geographical unit of reference to measure intra-national bilateral trade flows allows to estimating correctly the negative impact of distance on shipments. When we use sector disaggregated export flows of 50 Spanish provinces in years 2000 and 2005 split into inter-provincial and inter-national flows, we find that the border effect is reduced substantially and even becomes statistically not different from zero in some estimations

Examining the impact of visa restrictions on international tourist flows using panel data

Este estudio realiza un análisis del impacto sobre los flujos internacionales de turismo de las restricciones a la movilidad internacional introducidas por los visados. Con información novedosa en forma de panel para los años 2000 y 2010, y empleando la metodología de los modelos de gravedad, se encuentra una relación causal significativa y negativa de los visados sobre el turismo que se dirige hacia la mayor parte de las áreas en desarrollo (con excepción del Sur y el Este de Asia), aunque no en los movimientos hacia los países desarrollados. Por el contrario, en términos de la procedencia de los turistas, el impacto negativo es significativo y similar con independencia de que partan de países desarrollados o en desarrollo

The variation of export prices across and within firms

This paper uses transaction-level trade data to analyze the differences in export prices across and within Spanish firms exporting manufactures in the 2010-2014 period. The transactional nature of the database uncovers sizable differences in the price that an exporter charges for the same product and destination. These differences are related with the number of goods covered within each product category, the exported quantity per transaction and the number of transactions carried out by firms

The contribution of granular and fundamental comparative advantage to European Union countries' export specialisation

This paper analyzes the contribution of fundamental comparative advantage (a country-speci c component) and granular comparative advantage (a rm-speci c component) to European Union countries' export specialization. We nd that, on average, granular comparative advantage may explain export specialization in 29% of industries, which account for 47% of total exports. We also show that 60% of the variation in export specialization across countries and industries may be explained by granular comparative advantage. These results highlight that some outstanding rms may play a very important role in explaining European Union countries' export specialization.Ministerio de Economía y CompetitividadGobierno VascoGeneralitat Valencian