ProjectForm edit
| authors | Ralf Martin |
| title | Productivity Spreads, Market Power Spreads and Trade |
| year | 2010 |
| month | |
| status | CEP Discussion Paper |
| abstract | Much of recent Trade theory focuses on heterogeneity of firms and the differential impact trade policy might have on firms with different levels of productivity for example. A common problem is that most firm level dataset do not contain information on output prices of firms which makes it difficult to distinguish between productivity differences and differences in market power between firms. This paper develops a new econometric framework that allows estimating both firm specific productivity and market power in a semi-parametric way based on a control function approach. The framework is applied to Chilean firm level data from the early 1980, shortly after the country underwent wide ranging trade reforms. The finding is that in all sectors of the economy market power declined and productivity increased. In sectors with higher import penetration productivity at the bottom end of the distribution increased faster. At the same time market power declined primarily at the top end of the market power distribution. This suggests, that ignoring the effect on market power can lead to an underestimation of the positive effects of increased import penetration on productivity. The estimator is implemented as a STATA command. A preliminary alpha version is available from here. Copy this file in a suitable ado folder along with the additional STATA programme nlvarmu2core.ado. To run the command consult the helpfile which is available from here. |
| downloadinfo | http://cep.lse.ac.uk/pubs/download/dp0997.pdf |
| type | Working Paper |
| I | Attachment | Action | Size | Date | Who | Comment |
|---|---|---|---|---|---|---|
 ado |
nlvarmu2core.ado | manage | 8.8 K | 20 May 2011 - 13:03 | AdminUser | |
| ado |
varmu2nl.ado | manage | 22.4 K | 20 May 2011 - 13:02 | AdminUser | |
 hlp |
varmu2nl.hlp | manage | 3.4 K | 20 May 2011 - 13:02 | AdminUser |
Topic revision: r8 - 20 May 2011 - 13:03:07 - AdminUser
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Copyright © by Ralf Martin.