Skip to main content

Competition, markups, and the gains from international trade

Publication ,  Journal Article
Edmond, C; Midrigan, V; Xu, DY
Published in: American Economic Review
October 1, 2015

We study the procompetitive gains from international trade in a quantitative model with endogenously variable markups. We find that trade can significantly reduce markup distortions if two conditions are satisfied: (i ) there is extensive misallocation, and (ii ) opening to trade exposes hitherto dominant producers to greater competitive pressure. We measure the extent to which these two conditions are satisfied in Taiwanese producer-level data. Versions of our model consistent with the Taiwanese data predict that opening up to trade strongly increases competition and reduces markup distortions by up to one-half, thus significantly reducing productivity losses due to misallocation.

Duke Scholars

Altmetric Attention Stats
Dimensions Citation Stats

Published In

American Economic Review

DOI

EISSN

1944-7981

ISSN

0002-8282

Publication Date

October 1, 2015

Volume

105

Issue

10

Start / End Page

3183 / 3221

Related Subject Headings

  • Economics
  • 38 Economics
  • 35 Commerce, management, tourism and services
  • 15 Commerce, Management, Tourism and Services
  • 14 Economics
 

Citation

APA
Chicago
ICMJE
MLA
NLM
Edmond, C., Midrigan, V., & Xu, D. Y. (2015). Competition, markups, and the gains from international trade. American Economic Review, 105(10), 3183–3221. https://doi.org/10.1257/aer.20120549
Edmond, C., V. Midrigan, and D. Y. Xu. “Competition, markups, and the gains from international trade.” American Economic Review 105, no. 10 (October 1, 2015): 3183–3221. https://doi.org/10.1257/aer.20120549.
Edmond C, Midrigan V, Xu DY. Competition, markups, and the gains from international trade. American Economic Review. 2015 Oct 1;105(10):3183–221.
Edmond, C., et al. “Competition, markups, and the gains from international trade.” American Economic Review, vol. 105, no. 10, Oct. 2015, pp. 3183–221. Scopus, doi:10.1257/aer.20120549.
Edmond C, Midrigan V, Xu DY. Competition, markups, and the gains from international trade. American Economic Review. 2015 Oct 1;105(10):3183–3221.

Published In

American Economic Review

DOI

EISSN

1944-7981

ISSN

0002-8282

Publication Date

October 1, 2015

Volume

105

Issue

10

Start / End Page

3183 / 3221

Related Subject Headings

  • Economics
  • 38 Economics
  • 35 Commerce, management, tourism and services
  • 15 Commerce, Management, Tourism and Services
  • 14 Economics