Results

Blog

VoxEU:

Firms slice up global production to protect their knowhow

Imitation is a first-order concern for enterprises operating global production processes. Firms routinely source knowledge-intensive inputs from many countries, including those with weak intellectual property laws. This ...Read more...

CEP discussion paper

Employer market power: models and methods

It is now widely recognized that employers hold some wage-setting power over workers, and several recent reviews cover the resulting surge of research on monopsony. We take a high-level view, introducing the idea of the ...Read more...

Journal article

Journal of Industrial Economics:

Asymmetric pass-through and competition

We study the retail price pass-through of four major tax changes in petroleum products using daily pricing data from gas stations on small Greek islands. We find that (i) the pass-through of the tax hikes is five times h...Read more...

CEP discussion paper

Sticky gravity

International trade flows show strong persistence over time. Standard static gravity models cannot rationalize this persistence and lack a micro-foundation for including lagged trade flows as a determinant of current tra...Read more...

CEP discussion paper

The impact of price ceiling regulation: evidence from the retail gasoline market

We examine the short-run impact of price ceilings on retail gasoline prices in isolated oligopolistic markets, uniquely observing for which stations the regulation was binding and for which it was not. Leveraging daily p...Read more...

Blog

VoxEU:

Why inflation may respond faster to big shocks: The rise of state-dependent pricing

Macroeconomic models distinguish time-dependent pricing, where firms change prices at fixed intervals, from state-dependent pricing, where firms change prices in response to changing demand or costs. This column presents...Read more...

CEP discussion paper

What is the "right" geographic market definition?

This paper examines the "right" geographic definition of relevant markets by analyzing how excise tax pass-through varies with local competition in the retail gasoline market of a large metropolitan city. Using a natural...Read more...

Journal article

International Journal of Industrial Organization:

What is the "right" geographic market definition?

This paper examines the "right" geographic definition of relevant markets by analyzing how excise tax pass-through varies with local competition in the retail gasoline market of a large metropolitan city. Using a natural...Read more...

Blog

Vox EU:

Confusopoly unveiled: How firms use complexity to raise prices

Can entire markets strategically confuse consumers to raise prices? This column tracks the prices of nearly all mobile phone tariffs and handsets in the UK from 2010 to 2012, and finds that quality-adjusted prices rise i...Read more...

CentrePiece article

Cultural exception?

Why book publishing contradicts conventional wisdom about competition....Read more...

Journal article

International Economics:

Reassessing EU comparative advantage: the role of technology

Based on a sufficient statistics approach, we show how the state of technology of European industries relative to the rest of the world can be empirically assessed in a way that is simple in terms of computation, parsimo...Read more...

Blog

LSE Europp:

Cultural exception? Why regulating the book market contradicts conventional wisdom about competition

Fixing retail book prices is a common policy in Europe, but how does preventing competition affect booksellers and buyers? Christos Genakos, Lorien Sabatino and Tommaso Valletti find that when the ability to offer custom...Read more...

CEP discussion paper

Management and firm dynamism

We show better-managed firms are more dynamic in plant acquisitions, disposals, openings and closings in U.S. Census and international data. Better-managed firms also birth better-managed plants and improve the performan...Read more...

CEP discussion paper

Cultural exception? The impact of price regulation on prices and variety in the market for books

Fixed book price (FBP) agreements are a form of resale price maintenance applied to books in various countries. FBP restricts retail price competition with the aim of promoting book production variety. Yet, despite its p...Read more...

Blog

Vox EU:

Distributional consumer price indices and the measurement of inequality

Differences in consumption patterns between lower- and higher-income households suggest the potential for inflation inequality, but evidence on the scale and drivers of this disparity remains scarce. This column uses 'di...Read more...

Blog

Vox EU:

New approaches to measure (increasing) concentration in Europe

Concentration (the share of a market's output produced by its largest firms) is a key proxy for measuring market competition. This column introduces a cross-country dataset to measure concentration at the industry level ...Read more...

Journal article

Review of International Economics:

Political competition and the strategic adoption of free trade agreements

I study how political competition affects the feasibility of free trade agreements (FTAs). I show that the possibility of political turnover creates strategic motivations for the formation of FTAs. Specifically, a govern...Read more...

CEP discussion paper

Industry concentration in Europe: trends and methodological insights

Concentration - the share of an industry's output accounted for by its largest firms and a frequently used proxy of competition - has increased in European countries. This paper provides evidence about this development b...Read more...

CEP discussion paper

Trade and intergenerational income mobility: theory and evidence from the US

This paper studies how globalization influences intergenerational income mobility. We develop a dynamic economic geography model with overlapping generations, migration costs, and sectoral persistence. The model shows th...Read more...

Journal article

International Journal of Industrial Organization:

VAT pass-through and competition: evidence from the Greek islands

We examine how competition affects VAT pass-through in isolated oligopolistic markets as defined by the Greek islands. Using daily gasoline prices and a difference-in-differences methodology, we investigate how changes i...Read more...

CEP discussion paper

Political competition and the strategic adoption of free trade agreements

I study how political competition affects the feasibility of free trade agreements (FTAs). I show that the possibility of political turnover creates strategic motivations for the formation of FTAs. Specifically, a govern...Read more...

Blog

Promarket:

Does Domestic Competition Help EU Firms Compete Abroad?

In a survey of nearly 400 European firms that export abroad, Elena Argentesi, Livia De Simone, Stephan Paetz, Vincenzo Scrutinio find that most firms believe that competition forces them to produce cheaper and higher qua...Read more...

CEP discussion paper

Asymmetric pass-through and competition

We study the retail price pass-through of four major tax changes in petroleum products using daily pricing data from gas stations on small Greek islands. We find that (i) the pass-through of the tax hikes is five times h...Read more...

CEP discussion paper

Firm heterogeneity and imperfect competition in global production networks

How do production networks and market structure interact to shape the effects of trade and competition policy? We develop a model with two-sided firm heterogeneity, matching frictions, and imperfect supplier competition....Read more...

CEP discussion paper

Leaving the global playing field through optimal non-discriminatory corporate taxes and subsidies

Due to markup distortions, in international trade models with monopolistic competition and heterogeneous firms the market equilibrium is inefficient unless demand exhibits constant elasticity of substitution. When it doe...Read more...

Journal article

Journal of Economic Behavior & Organization:

House price expectations

This study examines short-, medium-, and long-run price expectations in housing markets. At the heart of our analysis is the combination of data from a tailored in-person household survey, past sale offerings, satellite ...Read more...

Journal article

The Quarterly Journal of Economics:

Measuring growth in consumer welfare with income-dependent preferences: nonparametric methods and estimates for the United States

How should we measure changes in consumer welfare given observed data on prices and expenditures? This article proposes a nonparametric approach that holds under arbitrary preferences that may depend on observable consum...Read more...

CEP discussion paper

Labour market power: new evidence on Non-Compete Agreements and the effects of M&A in the UK

Monopsony power is an important feature of modern labour markets. We examine its impact on workers. We report the first representative survey of Non-Compete-Agreements (NCA) in the UK and find that about 26% of workers a...Read more...

Blog

LSE Impact:

Dashboards have the power to make complex research accessible to the public and policymakers

While researchers often point to the relevance of their research, economic models and econometric methods are typically inaccessible to a wider audience. Gabriel Ahlfeldt explains how interactive dashboards represent a u...Read more...

CEP occasional paper

A micro-geographic house price index for England and Wales

We generate a mix-adjusted house price index for England and Wales from 2010 to 2020 at the level of lower-layer super output areas. To this end, we blend parametric and non-parametric estimation techniques and leverage ...Read more...

Journal article

Management Science:

Information spillovers in experience goods competition

Trialing an experience good allows consumers to learn their value for the sampled good and also informs beliefs about their value for similar products. These demand-side information spillovers across products create a re...Read more...

CEP discussion paper

VAT pass-through and competition: evidence from the Greek Islands

We examine how competition affects VAT pass-through in isolated oligopolistic markets as defined by the Greek islands. Using daily gasoline prices and a difference-in-differences methodology, we investigate how changes i...Read more...

CEP discussion paper

Firming up price inflation

We use data from a large panel survey of UK firms to analyze the economic drivers of price setting since the start of the Covid pandemic. Inflation responded asymmetrically to movements in demand. This helps to explain w...Read more...

Blog

Vox EU:

Local concentration and structural transformation

The national market shares of the leading US firms in many industries have risen substantially over the last four decades - ie, these industries have become more concentrated. David Autor, Christina Patterson and John Va...Read more...

Journal article

Review of Income and Wealth :

The well-being cost of inflation inequalities

In terms of well-being, how costly is inflation? To answer this question, empirical evaluations have typically studied average inflation rates at the national level, thus disregarding the role of inflation inequalities w...Read more...

Journal article

Regional Science and Urban Economics :

Micro-geographic property price and rent indices

We develop a programming algorithm that predicts a balanced-panel mix-adjusted house price index for arbitrary spatial units from repeated cross-sections of geocoded micro data. The algorithm combines parametric and non-...Read more...

Blog

Vox EU:

Firm inflation expectations in quantitative and text data

Inflation rates and short-term inflation expectations in the UK have increased significantly since 2021. This column uses quantitative and text data from the Decision Maker Panel to analyse the factors affecting inflatio...Read more...

CEP discussion paper

Patents that match your standards: firm-level evidence on competition and innovation

When a technology becomes the new standard, the firms that are leaders in producing this technology have a competitive advantage. Matching the semantic content of patents to standards and exploiting the exogenous timing ...Read more...

Journal article

American Economic Journal: Applied Economics :

Competition and pass-through: evidence from isolated markets

We measure how pass-through varies with competition in isolated oligopolistic markets with captive consumers. Using daily pricing data from gas stations on small Greek islands, we study how unanticipated and exogenous ch...Read more...

Blog

Vox EU:

The G7 plan for a price cap on Russian oil: Views of leading economists

To limit the funding of Russia's continued aggravation towards Ukraine and its subsequent impact on soaring energy prices, the G7 countries plan to impose a price cap on purchases of Russian oil and related products. Man...Read more...

CEP discussion paper

The well-being cost of inflation inequalities

In terms of well-being, how costly is inflation? To answer this question, empirical evaluations have typically studied average inflation rates at the national level, thus disregarding the role of inflation inequalities w...Read more...

Journal article

The Quarterly Journal of Economics :

The slope of the Phillips Curve: evidence from US States

We estimate the slope of the Phillips curve in the cross section of U.S. states using newly constructed state-level price indices for nontradeable goods back to 1978. Our estimates indicate that the slope of the Phillips...Read more...

CEP discussion paper

Market size, markups and international price dispersion in the cement industry

Prices for several intermediate inputs, including cement, are higher in developing economies - particularly in Africa. Combining data from the International Comparison Program with a global directory of cement plants we ...Read more...

Chapter

Industrial policy and competition

in Globalization, Firms, and Workers

Using a comprehensive dataset of all medium and large enterprises in China between 1998 and 2007, we show that industrial policies allocated to competitive sectors or that foster competition in a sector increase producti...Read more...

CEP discussion paper

Firm-level technological change and skill demand

We quantify the contribution of firm-level technological change to skill demand and aggregate inequality in the presence of imperfect competition in the labor market. We show that skill-biased technological change increa...Read more...

Blog

LSE Business Review:

Five ways for leaders to work faster, better, and more inclusively

As the world of work changes, so should leadership. Grace Lordan describes five ways for leaders to become more effective....Read more...

Blog

VoxEU:

Trade with nominal rigidities: understanding the unemployment and welfare effects of the China shock

Researchers examine how increased competition from China impacts the welfare of the US labour market....Read more...

Blog

VoxEU:

Inflation, market power, and price controls: views of leading economists

With sharply rising US inflation prompting debate about the potential role of powerful firms in driving up prices and whether antitrust interventions and/or price controls may be an effective policy response, the IGM For...Read more...

CEP discussion paper

House price expectations

This study examines short-, medium-, and long-run price expectations in housing markets. We derive and test six hypothesis about the incidence, formation, and relevance of price expectations. To do so, we use data from a...Read more...

Journal article

Journal of the European Economic Association:

Marshall lecture 2020 the measure of monopsony

There has been increasing interest in recent years in monopsony in the labour market. This paper discusses how we can measure monopsony power by combining insights from models based on both frictions and idiosyncrasies. ...Read more...

CEP discussion paper

Product market competition, creative destruction and innovation

We examine the economic analysis of the relationship between innovation and product market competition. First, we give a brief tour of the intellectual history of the area. Second, we examine how the Aghion-Howitt framew...Read more...

Journal article

Journal of International Economics:

Import competition, heterogeneous preferences of managers, and productivity

When managers have objectives beyond maximizing monetary profits, inefficiencies may arise. An increase in competition may then force managers to improve the productivity of the firm in order to ensure survival. While th...Read more...

CEP discussion paper

Intangibles and industry concentration: supersize me

This paper presents new evidence on the growing scale of big businesses in the United States, Japan and 11 European countries. It documents a broad increase in industry concentration across the majority of countries and ...Read more...

Government consultation

A response to the consultation document: 'A new pro-competition regime for digital markets'

Professor John Van Reenen writing to submit his views on the government's consultation document 'A new pro-competition regime for digital markets'....Read more...

CEP discussion paper

Opposing firm-level responses to the China shock: horizontal competition versus vertical relationships

We decompose the "China shock" into two components that induce different adjustments for firms exposed to Chinese exports: a horizontal shock affecting firms selling goods that compete with similar imported Chinese goods...Read more...

CEP discussion paper

Micro-geographic property price and rent indices

We develop a programming algorithm that predicts a balanced-panel mix-adjusted house price index for arbitrary spatial units from repeated cross-sections of geocoded micro data. The algorithm combines parametric and non-...Read more...

CEP discussion paper

The measure of monopsony

There has been increasing interest in recent years in monopsony in labour market. This paper discusses how we can measure monopsony power combining insights from models based on both frictions and idiosyncrasies. It pres...Read more...

CentrePiece article

In brief... Competition and pass-through on the Greek islands

A fundamental issue in economics is how firms deal with unexpected cost increases, perhaps arising from taxes, exchange rate fluctuations or rising input prices: what drives the extent to which they pass the costs throug...Read more...

Journal article

Journal of the European Economic Association:

Organizing global supply chains: input-output linkages and vertical integration

We study how the technological importance of inputs?measured by cost shares?is related to the decision to ?make? or ?buy? that input. Using detailed French international trade data and an instrumental variable approach b...Read more...

CEP discussion paper

Innovation and human capital policy

If innovation is to be subsidized, a natural place to start is to increase the quantity and quality of human capital. Innovation, after all, begins with people. Simply stimulating the ?demand side? through R&D subsidies ...Read more...

Journal article

European Economic Review:

Global banking: endogenous competition and risk taking

When banks expand abroad, their riskiness decreases if foreign expansion happens in destination countries that are more competitive than their origin countries. We reach this conclusion in three steps. First, we develop ...Read more...

CEP Covid-19 analysis

Prices and inflation in a pandemic - a micro data approach

The Covid-19 lockdowns and recession are the most exceptional economic events in living memory and will impact the economy for years to come. One vital channel is via price changes. Price rises and cuts alter real wages,...Read more...

CEP discussion paper

Why have house prices risen so much more than rents in superstar cities?

In most countries ? particularly in supply constrained superstar cities ? house prices have risen much more strongly than rents over the last two decades. We provide an explanation that does not rely on falling interest ...Read more...

Journal article

ILR Review:

Monopsony in labor markets: a review

Researchers? interest in monopsony has increased in recent years. This article reviews the accumulating evidence that employers have considerable monopsony power. It summarizes the application of this idea to explaining ...Read more...

CEP discussion paper

Generalized linear competition: from pass-through to policy

Economic policy and shifts in input market prices often have significant effects on the marginal costs of firms and can prompt strategic responses that make their impact hard to predict. We introduce "generalized linear ...Read more...

CEP discussion paper

Environmental preferences and technological choices: is market competition clean or dirty?

We investigate the effects of consumers' environmental concerns and market competition on firms' decisions to innovate in 'clean' technologies. Agents care about their consumption and environmental footprint; firms pursu...Read more...

CentrePiece article

The cost of being young: measuring intergenerational consumer prices

The UK's young adults are navigating a very different economic landscape to earlier generations, including low real wage growth, lower likelihood of owning their own home and the uncertain prospects of Brexit. Rahat Sidd...Read more...

Journal article

The Economic Journal:

Merger policy in a quantitative model of international trade

In a two-country international trade model with oligopolistic competition, we study the conditions on market structure and trade costs under which a merger policy designed to benefit domestic consumers is either too toug...Read more...

CEP discussion paper

Import competition, heterogeneous preferences of managers and productivity

When managers have objectives beyond maximizing monetary profits, inefficiencies may arise. An increase in competition may then force managers to improve the productivity of the firm in order to ensure survival. While th...Read more...

CEP discussion paper

Trade, productivity and (mis)allocation

We examine the gains from globalization in the presence of firm heterogeneity and potential resource misallocation. We show theoretically that without distortions, bilateral and export liberalizations increase aggregate ...Read more...

Journal article

European Economic Review:

Strategic inattention, delegation and endogenous market structure

We model an industry in which a discrete number of firms choose the output of their differentiated products, deciding whether or not to consider the impact of their decisions on aggregate output. The firm's choice of ign...Read more...

Journal article

Fiscal Studies:

Financing local police spending in England and Wales: fiscal federalism in practice

Since 1995, police forces in England and Wales have been able to raise revenues locally to supplement grants from central government. We analyse the variation across police force areas in locally raised police revenues o...Read more...

Journal article

Journal of Environmental Economics and Management:

Ease vs. noise: long-run changes in the value of transport (dis)amenities

For a complete cost-benefit analysis of durable infrastructures, it is important to understand how the value of non-market goods such as transit time and environmental quality changes as incomes rise in the long-run. We ...Read more...

Journal article

Journal of International Economics:

Geography, competition, and optimal multilateral trade policy

How should multilateral trade policy be designed in a world in which countries differ in terms of market access and technology, and firms with market power differ in terms of productivity? We answer this question in a mo...Read more...

CEP discussion paper

Competition and pass-through: evidence from isolated markets

We measure how pass-through varies with competition in isolated oligopolistic markets with captive consumers. Using daily pricing data from gas stations on small Greek islands, we study how unanticipated and exogenous ch...Read more...

CEP discussion paper

A toolkit of policies to promote innovation

Economic theory suggests that market economies are likely to under-provide innovation due to the public good nature of knowledge. Empirical evidence from the US and other advanced economies supports this idea. We summari...Read more...

CEP discussion paper

Ease versus noise: long-run changes in the value of transport (dis)amenities

For a complete cost-benefit analysis of durable infrastructures, it is important to understand how the value of non-market goods such as transit time and environmental quality changes as incomes rise in the long-run. We ...Read more...

Journal article

Journal of International Economics:

Foreign expansion, competition and bank risk

Using a novel dataset on the 15 European banks classified as G-SIBs from 2005 to 2014, we find that the impact of foreign expansion on risk is always negative and significant for most individual and systemic risk metrics...Read more...

Journal article

American Economic Review:

What drives differences in management practices?

Partnering with the US Census Bureau, we implement a new survey of "structured" management practices in two waves of 35,000 manufacturing plants in 2010 and 2015. We fnd an enormous dispersion of management practices acr...Read more...

CEP discussion paper

Geography, competition and optimal multilateral trade policy

How should multilateral trade policy be designed in a world in which countries differ in terms of market access and technology, and firms with market power differ in terms of productivity? We answer this question in a mo...Read more...

Journal article

Scandinavian Journal of Economics:

Gender and promotions: evidence from academic economists in France

Differences in promotion across genders are still prevalent in many occupations. Recent work based on experimental evidence indicates that women participate less in or exert lower effort during contests. We exploit the u...Read more...

Journal article

International Journal of Industrial Organization:

Flex cars and competition in fuel retail markets

We study how the diffusion of flex (bi-fuel) cars affected competition on ethanol and gasoline retail markets. We propose a model of price competition in which the two fuels become closer substitutes as flex cars penetra...Read more...

CentrePiece article

When innovation policy trumped protectionism: the Reagan years

Giammario Impullitti and colleagues show that it was the Reagan administration's innovation policy - not a retreat from globalisation - that promoted US growth....Read more...

CentrePiece article

Europe's transformation after Gutenberg: the impact of new media and competition

Jeremiah Dittmar explores the effects of the printing press and the new forms of competition that accompanied its introduction....Read more...

Journal article

Journal of Political Economy:

Monopolistic competition and optimum product diversity under firm heterogeneity

Empirical work has drawn attention to the high degree of productivity differences within industries and their role in resource allocation. This paper examines the allocational efficiency of such markets. Productivity dif...Read more...

CEP discussion paper

New media and competition: printing and Europe's transformation after Gutenberg

We study the role of book content in economic, religious, and institutional development after the introduction of printing, and the role of competition in determining the amount and content of local printing. We focus on...Read more...

CEP discussion paper

Monetary policy, product market competition and growth

In this paper we argue that monetary easing fosters growth more in more credit-constrained environments, and the more so the higher the degree of product market competition. Indeed when competition is low, large rents al...Read more...

CEP discussion paper

Innovation and trade policy in a globalized world

How do import tariffs and R&D subsidies help domestic firms compete globally? How do these policies affect aggregate growth and economic welfare? To answer these questions we build a dynamic general equilibrium growth mo...Read more...

Journal article

Economics of Education Review:

The threat of competition and public school performance: evidence from Poland

Theoretical literature on whether school competition raises public school productivity is ambiguous (e.g. MacLeod & Urquiola, 2015) and empirical evidence is mixed (e.g. Hsieh and Urquiola, 2006). Moreover, competition m...Read more...

Journal article

Urban Studies:

Does the law of one price hold for hedonic prices?

Hedonic prices of locational attributes in urban land markets are determined by a process of spatial arbitrage that is similar to that which underpins the law of one price. If hedonic prices deviate from their spatial eq...Read more...

Journal article

Journal of Public Economics:

Does competition from private surgical centres improve public hospitals? performance? Evidence from the English National Health Service

This paper examines the impact of a government programme which facilitated the entry of for-profit surgical centres to compete against incumbent National Health Service hospitals in England. We examine the impact of comp...Read more...

CEP discussion paper

Fiscal and education spillovers from charter school expansion

The fiscal and educational consequences of charter expansion for non-charter students are central issues in the debate over charter schools. Do charter schools drain resources and high-achieving peers from non-charter sc...Read more...

CEP discussion paper

Foreign expansion, competition and bank risk

Using a novel dataset on the 15 European banks classified as G-SIBs from 2005 to 2014, we find that the impact of foreign expansion on risk is always negative and significant for most individual and systemic risk metrics...Read more...

Journal article

The Economic Journal:

The time value of housing: historical evidence on discount rates

Most London housing transactions involve trading long leases of varying lengths. We exploit this to estimate the time value of housing ? the relationship between the price of a property and the term of ownership ? over a...Read more...

Journal article

Journal of Political Economy Macroeconomics :

Innovation and trade policy in a globalized world

How do import tariffs and R&D subsidies help domestic firms compete globally? How do these policies affect aggregate growth and economic welfare? To answer these questions, we build a dynamic general equilibrium growth m...Read more...

Journal article

CESifo Economic Studies:

Weights to address non-parallel trends in panel difference-in-differences models

Causal inference using the difference-in-differences (DD) method relies on the untestable assumption of parallel counterfactual trends across units that are assigned to different treatments. To facilitate the application...Read more...

Journal article

The Review of Financial Studies:

Managing the family firm: evidence from CEOs at work

We build a comparable and bottom-up measure of CEO labor supply for 1,114 CEOs and investigate whether family and professional CEOs differ along this dimension. Family CEOs work 9% fewer hours relative to professional CE...Read more...

Journal article

Journal of International Economics:

The buyer margins of firms? exports

We use detailed data on exporters from Costa Rica, Ecuador and Uruguay as well as on their buyers to show that: aggregate exports are disproportionally driven by few multi-buyers exporters; and each multi-buyer exporter'...Read more...

Journal article

Social science & medicine:

Ownership and hospital behaviour: employment and local unemployment

In this paper, we address two issues: i) how hospital employment changes with local unemployment, according to the type of hospital ownership, and ii) whether this relationship changed after the implementation of a pro-c...Read more...

Journal article

Economics of Education Review:

Smart but unhappy: independent-school competition and the wellbeing-efficiency trade-off in education

We study whether independent-school competition involves a trade-off between pupil wellbeing and academic performance. To test this hypothesis, we analyse data covering pupils across the OECD, exploiting historical Catho...Read more...