SMU SOE Seminar (May 3, 2019, 2-3.30pm): Imperfect Competition in Firm-to-Firm Trade

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ABSTRACT This paper studies the implications of imperfect competition in firm-to-firm trade. Using a dataset on all transactions between Belgian firms, we find that firms charge higher markups if they have higher input shares among their buyers. We build a model where firms charge different markups to buyers based on the input shares they have in each buyer. The estimated model suggests large distortions due to double marginalization: Reducing all markups in firm-to-firm trade by 20 percent increases welfare by 10 percent. We also highlight the importance of accounting for endogeneities in firm-to-firm markups in predicting the effects of shock transmissions. Click here to view the paper. Click here to view the CV.
		PRESENTER Ken Kikkawa University of British Columbia
		RESEARCH FIELDS Trade Industrial Organization Macroeconomics
		DATE: 3 May 2019 (Friday)
		TIME: 2pm - 3.30pm
		VENUE: Meeting Room 5.1, Level 5 School of Economics Singapore Management University 90 Stamford Road Singapore 178903