Openness to Trade and Industry Cost Dispersion: Evidence from a Panel of Italian Firms

34 Pages Posted: 11 Jan 2008

See all articles by Massimo Del Gatto

Massimo Del Gatto

CRENOS - Centre for North South Economic Research; 'Gabriele d'Annunzio' University of Chieti-Pescara - Faculty of Economics

Gianmarco I.P. Ottaviano

Bocconi University - Department of Economics and Paolo Baffi Centre on Central Banking and Financial Regulation

Marcello Pagnini

Bank of Italy

Multiple version iconThere are 2 versions of this paper

Date Written: 2007-05

Abstract

We use Italian firm-level data to investigate the impact of trade openness on the distribution of firms across marginal cost levels. In so doing, we implement a procedure that allows us to control not only for the standard transmission bias identified in firm-level TFP regressions but also for the omitted price bias due to imperfect competition. We find that more open industries are characterized by a smaller dispersion of costs across active firms. Moreover, in those industries the average cost is also smaller.

Suggested Citation

Del Gatto, Massimo and Ottaviano, Gianmarco I.P. and Pagnini, Marcello, Openness to Trade and Industry Cost Dispersion: Evidence from a Panel of Italian Firms (2007-05). Journal of Regional Science, Vol. 48, Issue 1, pp. 97-129, February 2008, Available at SSRN: https://ssrn.com/abstract=1082106 or http://dx.doi.org/10.1111/j.1467-9787.2008.00546.x

Massimo Del Gatto (Contact Author)

CRENOS - Centre for North South Economic Research ( email )

Cagliari
Italy

'Gabriele d'Annunzio' University of Chieti-Pescara - Faculty of Economics ( email )

Faculty of Economics - Department of Economics
Viale Pindaro, 42
Pescara, 65127
Italy

Gianmarco I.P. Ottaviano

Bocconi University - Department of Economics and Paolo Baffi Centre on Central Banking and Financial Regulation ( email )

Via Gobbi 5
Milan, 20136
Italy

Marcello Pagnini

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
10
Abstract Views
671
PlumX Metrics