Publication:
Market Presence, Contestability, and the Terms-of-Trade Effects of Regional Integration

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dc.contributor.authorSchiff, Maurice
dc.contributor.authorChang, Won
dc.date.accessioned2013-09-09T20:46:06Z
dc.date.available2013-09-09T20:46:06Z
dc.date.issued2001-01
dc.description.abstractHow firms react to a given shock may depend on the degree to which rivals are present and on whether potentially viable entrants to that market exist. The authors try to measure these effects internationally by examining the price behavior of the United States in Brazil's market when MERCOSUR trade liberalization and most-favored-nation (MFN) trade liberalization take place. Using detailed panel data on trade and tariff rates, they find that both the market presence of a preferred supplier and expected entry lessen the U.S. price reaction to MFN trade liberalization and increase the U.S. price reaction to preferential trade liberalization. Argentina's presence in Brazil's market results in a smaller U.S. price response to Brazil's MFN tariff change and in a larger response to a preferential tariff change. More surprisingly, the quantitative effects of market presence and expected entry (contestability) are not significantly different from each other. Contestability plays no significant role when Argentina's is absent from Brazil's market, contestability lessens the U.S. response to changes in the MFN tariff and increases it in response to changes in the preferential tariff. It follows from these results that presence in, as well as threat of entry into, partners' markets implies lower optimal external tariffs and suggests that regional agreements can have pro-competitive effects in the presence of contestability. The authors also examine the hypothesis of "symmetry" between the effect of tariffs and that of exchange rates.en
dc.identifierhttp://documents.worldbank.org/curated/en/2001/01/1000458/market-presence-contestability-terms-of-trade-effects-regional-integration
dc.identifier.doi10.1596/1813-9450-2532
dc.identifier.urihttps://hdl.handle.net/10986/15740
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 2532
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectABSOLUTE VALUE
dc.subjectBERTRAND COMPETITION
dc.subjectBLOC FORMATION
dc.subjectCOMPETITIVENESS
dc.subjectCONDITION OF ENTRY
dc.subjectCONSUMER PRICES
dc.subjectCONTESTABILITY
dc.subjectCONTESTABLE MARKETS
dc.subjectCURRENCY
dc.subjectCUSTOMS
dc.subjectCUSTOMS UNION
dc.subjectDIFFERENTIATED PRODUCTS
dc.subjectECONOMIC POLICY
dc.subjectECONOMIES OF SCALE
dc.subjectEMPIRICAL ANALYSIS
dc.subjectENDOGENOUS TARIFF FORMATION
dc.subjectEXCHANGE RATE
dc.subjectEXCHANGE RATES
dc.subjectEXPORT MARKETS
dc.subjectEXPORT PRICE
dc.subjectEXPORT PRICES
dc.subjectEXPORTERS
dc.subjectEXPORTS
dc.subjectEXTERNAL TARIFF
dc.subjectEXTERNAL TARIFFS
dc.subjectEXTERNAL TRADE
dc.subjectEXTERNAL TRADE BARRIERS
dc.subjectFOREIGN FIRMS
dc.subjectFREE TRADE
dc.subjectHOME MARKET
dc.subjectIMPERFECT COMPETITION
dc.subjectIMPORT PRICES
dc.subjectIMPORTS
dc.subjectINPUT PRICES
dc.subjectINTERNAL FREE TRADE
dc.subjectINTERNAL LIBERALIZATION
dc.subjectINTERNATIONAL ECONOMICS
dc.subjectINTERNATIONAL MARKETS
dc.subjectLOCAL CURRENCY
dc.subjectMARGINAL COST
dc.subjectMARGINAL COSTS
dc.subjectMARKET ACCESS
dc.subjectMARKET BEHAVIOR
dc.subjectMARKET PRESENCE
dc.subjectMARKET SHARE
dc.subjectMARKET SHARES
dc.subjectMARKET STRUCTURE
dc.subjectMEMBER COUNTRY
dc.subjectMFN TARIFFS
dc.subjectMOST-FAVORED- NATION
dc.subjectMOST-FAVORED-NATION
dc.subjectNON- MEMBER COUNTRIES
dc.subjectNON-MEMBER COUNTRIES
dc.subjectOLIGOPOLY
dc.subjectPOLICY REFORMS
dc.subjectPREFERENTIAL LIBERALIZATION
dc.subjectPREFERENTIAL TARIFF
dc.subjectPREFERENTIAL TARIFFS
dc.subjectPREFERENTIAL TRADE
dc.subjectPREFERENTIAL TRADE LIBERALIZATION
dc.subjectPREFERENTIAL TRADE POLICY
dc.subjectPRICE EFFECT
dc.subjectPRICE EFFECTS
dc.subjectPRICE INDEX
dc.subjectPRO-COMPETITIVE EFFECTS
dc.subjectPRODUCERS
dc.subjectPRODUCT CATEGORIES
dc.subjectREDUCING PRICES
dc.subjectREGIONAL AGREEMENT
dc.subjectREGIONAL BLOCS
dc.subjectREGIONAL INTEGRATION
dc.subjectREGIONAL INTEGRATION AGREEMENTS
dc.subjectREGIONALISM
dc.subjectRETAIL
dc.subjectSALES
dc.subjectSUPPLIERS
dc.subjectTARIFF DATA
dc.subjectTARIFF RATE
dc.subjectTARIFF RATES
dc.subjectTARIFF REDUCTION
dc.subjectTARIFF STRUCTURE
dc.subjectTERMS OF TRADE
dc.subjectTRADE BLOC
dc.subjectTRADE CREATION
dc.subjectTRADE DATA
dc.subjectTRADE EFFECTS
dc.subjectTRADE GAINS
dc.subjectTRADE LIBERALIZATION
dc.subjectTRADE PATTERN
dc.subjectTRADE POLICIES
dc.subjectTRADE POLICY
dc.subjectTRADE VOLUME
dc.subjectTRADING PARTNER
dc.subjectTRADING PARTNERS
dc.subjectUNILATERAL REFORMS
dc.subjectWORLD MARKET TERMS OF TRADE
dc.subjectCONTESTABILITY
dc.subjectTRADE LIBERALIZATION
dc.subjectMOST FAVOURED NATION CLAUSE
dc.subjectTARIFFS
dc.subjectEXCHANGE RATES
dc.subjectREGIONAL TRADE AGREEMENTS
dc.titleMarket Presence, Contestability, and the Terms-of-Trade Effects of Regional Integrationen
dspace.entity.typePublication
okr.crossref.titleMarket Presence, Contestability, and the Terms-of-Trade Effects of Regional Integration
okr.date.doiregistration2025-04-10T09:18:51.019408Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2001/01/1000458/market-presence-contestability-terms-of-trade-effects-regional-integration
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeFinance and Markets
okr.globalpracticeTrade and Competitiveness
okr.guid606781468768837597
okr.identifier.doi10.1596/1813-9450-2532
okr.identifier.externaldocumentum000094946_01021606264631
okr.identifier.internaldocumentum1000458
okr.identifier.reportWPS2532
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2001/03/07/000094946_01021606264631/Rendered/PDF/multi_page.pdfen
okr.region.administrativeLatin America & Caribbean
okr.sectorIndustry and trade :: Other domestic and international trade
okr.topicInternational Economics and Trade::Access to Markets
okr.topicInternational Economics and Trade::Trade and Regional Integration
okr.topicInternational Economics and Trade::Free Trade
okr.topicMacroeconomics and Economic Growth::Markets and Market Access
okr.topicEnvironmental Economics and Policies
okr.unitOff of Sr VP Dev Econ/Chief Econ (DECVP)
okr.volume1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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