Abstract

http://ssrn.com/abstract=1639639
 
 

References (30)



 
 

Citations (44)



 


 



Market Structure and Market Access


Joseph F. Francois


Johannes Kepler University Linz; Centre for Economic Policy Research (CEPR); Vienna Institute of International Economic Studies (WIIW); University of Adelaide - School of Economics

Ian Wooton


University of Strathclyde - Department of Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)


World Economy, Vol. 33, No. 7, pp. 873-893, July 2010

Abstract:     
We explore an issue at the nexus of domestic competition policy and international trade, the interaction between goods trade and market power in domestic trade and distribution sectors. We examine the effect of variations in conditions of domestic competition in services on trade volumes in goods in the cases of both linear and nonlinear import demand, including standard form CES-based gravity models of bilateral trade flows. Theory suggests a set of linkages between service-sector pricing and goods trade supported by econometrics involving imports of 22 OECD countries vis-a-vis 69 exporters. Competition in distribution services affects the volume of trade in goods. Additionally, because of interaction between tariffs and pricing, the market structure of the domestic service sector becomes increasingly important as tariffs are reduced. Indeed, depending on the degree of competition, market access concessions on tariffs may be effectively undone in some cases by changes in margins. For exporters, we find that service competition in destination markets matters most for exporters from smaller, poorer countries. Our results also suggest that while negotiated agreements leading to cross-border services liberalisation may boost goods trade as well, they may also lead to a fall in goods trade when such liberalisation involves FDI leading to increased service sector concentration.

Number of Pages in PDF File: 21

Accepted Paper Series


Date posted: July 14, 2010  

Suggested Citation

Francois, Joseph F. and Wooton, Ian, Market Structure and Market Access. World Economy, Vol. 33, No. 7, pp. 873-893, July 2010. Available at SSRN: http://ssrn.com/abstract=1639639 or http://dx.doi.org/10.1111/j.1467-9701.2010.01234.x

Contact Information

Joseph F. Francois (Contact Author)
Johannes Kepler University Linz ( email )
Altenbergerstrasse 69
A-4040 Linz, 4040
Austria
HOME PAGE: http://www.i4ide.org/francois/
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Vienna Institute of International Economic Studies (WIIW) ( email )
Oppolzergasse 6
A-1010 Vienna
Austria
University of Adelaide - School of Economics ( email )
Adelaide SA, 5005
Australia
+61 8 8303 5540 (Phone)
+61 8 8223 1460 (Fax)
Ian Wooton
University of Strathclyde - Department of Economics ( email )
Sir William Duncan Building
130 Rottenrow
Glasgow G4 0GE
United Kingdom
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
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References:  30
Citations:  44

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