Intra-industry Adjustment to Import Competition: Theory and Application to the German Clothing Industry
Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung › begutachtet
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in: World Economy, Jahrgang 33, Nr. 8, 08.2010, S. 1006-1022.
Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung › begutachtet
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TY - JOUR
T1 - Intra-industry Adjustment to Import Competition
T2 - Theory and Application to the German Clothing Industry
AU - Raff, H
AU - Wagner, J
PY - 2010/8
Y1 - 2010/8
N2 - This paper uses an oligopoly model with heterogeneous firms to examine how an industry adjusts to rising import competition. The model predicts that in the short run the least efficient firms in the industry become inactive, surviving firms face a fall in output, mark-ups and profits, and average industry productivity increases due to a selection effect. These pro-competitive effects of import penetration on the domestic industry disappear in the long run. The predictions for the short run are confirmed in an empirical study of the German clothing industry.
AB - This paper uses an oligopoly model with heterogeneous firms to examine how an industry adjusts to rising import competition. The model predicts that in the short run the least efficient firms in the industry become inactive, surviving firms face a fall in output, mark-ups and profits, and average industry productivity increases due to a selection effect. These pro-competitive effects of import penetration on the domestic industry disappear in the long run. The predictions for the short run are confirmed in an empirical study of the German clothing industry.
KW - Economics
UR - http://www.scopus.com/inward/record.url?scp=77955130344&partnerID=8YFLogxK
U2 - 10.1111/j.1467-9701.2010.01310.x
DO - 10.1111/j.1467-9701.2010.01310.x
M3 - Journal articles
VL - 33
SP - 1006
EP - 1022
JO - World Economy
JF - World Economy
SN - 0378-5920
IS - 8
ER -