Intra-industry adjustment to import competition: theory and application to the German clothing industry
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Lüneburg: Institut für Volkswirtschaftslehre der Universität Lüneburg, 2009. (Working paper series in economics; No. 144).
Research output: Working paper › Working papers
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TY - UNPB
T1 - Intra-industry adjustment to import competition
T2 - theory and application to the German clothing industry
AU - Raff, Horst
AU - Wagner, Joachim
N1 - Literaturverz. S. 13 - 14. - Parallel als Online-Ausg. erschienen unter der Adresse http://www.uni-lueneburg.de/fb2/vwl/papers/wp_144_Upload.pdf
PY - 2009
Y1 - 2009
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 the average productivity of survivors increases. 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 the average productivity of survivors increases. 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
KW - international trade
KW - firm heterogeneity
KW - clothing industry
M3 - Working papers
T3 - Working paper series in economics
BT - Intra-industry adjustment to import competition
PB - Institut für Volkswirtschaftslehre der Universität Lüneburg
CY - Lüneburg
ER -