Arbeitspapier

Rules of Origin and Market Power

We study how domestic content requirements in Free Trade Areas (FTAs) affect market power and market structure in concentrated intermediate goods markets. We show that content requirements increase oligopolistic markups beyond the level that would obtain under an equivalent import tariff, and we document patterns in Canadian export data and US producer price data that align with the model’s predictions: producers of intermediate goods charge comparatively higher prices when the associated final goods producers are more constrained by FTA origin requirements and by Most Favoured Nation (MFN) tariffs for both intermediate and final non-FTA goods.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 8512

Klassifikation
Wirtschaft
Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
Trade Policy; International Trade Organizations
Empirical Studies of Trade
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Thema
free trade areas
content requirements
market power

Ereignis
Geistige Schöpfung
(wer)
Chung, Wanyu
Perroni, Carlo
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and Ifo Institute (CESifo)
(wo)
Munich
(wann)
2020

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Chung, Wanyu
  • Perroni, Carlo
  • Center for Economic Studies and Ifo Institute (CESifo)

Entstanden

  • 2020

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