Openness to Trade and Industry Cost Dispersion: Evidence From a Panel of Italian Firms*
Year: 2008
Type: article
Abstract: 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.
Source: Journal of Regional Science
Institutions: University of Cagliari, University of Bologna, Bank of Italy
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3124748426