Competitive Pressure and Economic Integration: An Illustration for Spain, 1983–1996

Posted: 21 Jul 2016

See all articles by Georges Siotis

Georges Siotis

Universidad Carlos III de Madrid - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: February 7, 2003

Abstract

This paper estimates sectoral mark-ups in the Spanish economy during the period 1983–1996. The data consists of a large firm level data set that encompasses all sectors of economic activity apart from financial institutions. The time period considered is well suited to assess the pro-competitive effect of economic integration, as Spain’s economy became fully integrated in the EU, which was itself embarking on a massive liberalisation exercise. I find that sectors most exposed to international competition witnessed a significant drop in margins, while those more sheltered from competitive pressures did not. Finally, comparing estimated mark-ups to accounting margins indicates that the latter are a reasonable proxy for margins obtained econometrically.

Keywords: Mark-ups, Economic integration, Instrumental variables, GMM

JEL Classification: L13, L4, L6

Suggested Citation

Siotis, Georges, Competitive Pressure and Economic Integration: An Illustration for Spain, 1983–1996 (February 7, 2003). International Journal of Industrial Organization, Vol. 21, 2003, Available at SSRN: https://ssrn.com/abstract=2812172

Georges Siotis (Contact Author)

Universidad Carlos III de Madrid - Department of Economics ( email )

Calle Madrid 126
Getafe, 28903
Spain
+34 91 624 9312 (Phone)
+34 91 624 9875 (Fax)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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