Price‐Cost Margins and Economic Integration: How Important is the Pro‐Competitive Effect?

6 Pages Posted: 14 May 2015

See all articles by Oscar Bajo‐Rubio

Oscar Bajo‐Rubio

University of Castilla-La Mancha

Carmen Díaz‐Roldán

University of Castilla-La Mancha

Antonio G. Gómez‐Plana

Public University of Navarre - Department of Economics

Date Written: May 2015

Abstract

In this paper, we examine whether the so‐called pro‐competitive effect holds when two countries integrate by forming a common market. We propose a general framework of reference, where the price‐cost margin of domestic firms depends on a set of variables in addition to trade costs with the partner country, which might eventually offset the conventional result.

Suggested Citation

Bajo-Rubio, Oscar and Diaz-Roldan, Carmen and Gomez-Plana, Antonio G., Price‐Cost Margins and Economic Integration: How Important is the Pro‐Competitive Effect? (May 2015). The World Economy, Vol. 38, Issue 5, pp. 893-898, 2015. Available at SSRN: https://ssrn.com/abstract=2605272 or http://dx.doi.org/10.1111/twec.12245

Oscar Bajo-Rubio (Contact Author)

University of Castilla-La Mancha ( email )

Facultad de Derecho y Ciencias Sociales
Ronda de Toledo, s/n
Ciudad Real, E-13071
Spain
+34 926 295300 (Phone)
+34 926 295211 (Fax)

HOME PAGE: http://blog.uclm.es/oscarbajorubio/

Carmen Diaz-Roldan

University of Castilla-La Mancha ( email )

Facultad de Derecho y CC Sociales
Ciudad Real, Ciudad Real 13071
Spain

Antonio G. Gomez-Plana

Public University of Navarre - Department of Economics ( email )

Campus de Arrosadia
Pamplona, Navarra 31006
Spain

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