Europe's revolving doors: Import competition and endogenous firm entry institutions

Arbeitspapier

The close relationship between politics and enterprises made the revolving door wide open and reinforced business influence on political decisions. The paper analyses relationship between firm entry institutions and import competition inside the EU. Though there is a clear tendency for entry and startup costs to decrease over time and particularly in space, I challenge the view that greater openness to trade automatically leads to improved firm entry institutions. My model enables calculating business entry impediments whereas lobbying game produces structural estimates of the counterfactual levels of trade, prices and earnings had no business obstacles existed. Conditions for active entry barriers are laid down in terms of extensive margin and asymmetries in technology and trade costs. Importantly, the model demonstrates that startling differences in firm regulation can be explained resorting to relative gains and losses accruing in a fully trading network as is the EU. More generally, understanding factors which affect imports is crucial for any model seeking to uncover ex ante welfare effects of trade.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Kiel Advanced Studies Working Papers ; No. 464

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models ; Institutions and the Macroeconomy ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Empirical Studies of Trade ; Economic Integration ; International Institutional Arrangements
• Subject: trade ; entry institutions ; firm heterogeneity ; foreign competition

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lastauskas, Povilas
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/84971
• Last update: 10.03.2025, 11:42 AM CET