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Imports and the structure of retail markets

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  • Horst Raff
  • Nicolas Schmitt
Abstract
We construct a model of trade with heterogeneous retailers to examine the effects of trade liberalization on retail market structure, imports and social welfare. We are especially interested in investigating the transmission of lower import prices into consumer prices and the effects of retail market regulation. The paper shows that changes in import prices may have large effects on consumer prices and import volumes when changes in retail market structure are taken into account, and that restrictions on retailing, as they occur in several countries, may significantly alter this transmission mechanism by reducing imports and raising consumer prices. On construit un modèle de commerce international avec des détaillants hétérogènes pour examiner les effets de la libéralisation du commerce sur la structure du marché de détail, les importations, et le niveau de bien‐être social. On est particulièrement intéresséà analyser la transmission de prix plus bas à l’importation vers les prix au consommateur, et les effets de la réglementation du marché de détail. Le mémoire montre que les changements dans les prix à l’importation peuvent avoir des effets importants sur les prix à la consommation et les volumes d’importation quand on prend en compte les changements dans la structure du marché de détail, et que les restrictions sur le commerce de détail, comme il en existe dans plusieurs pays, peuvent modifier le mécanisme de transmission en réduisant les importations et en augmentant les prix au consommateur.

Suggested Citation

  • Horst Raff & Nicolas Schmitt, 2012. "Imports and the structure of retail markets," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(4), pages 1431-1455, November.
    • Handle: RePEc:wly:canjec:v:45:y:2012:i:4:p:1431-1455
    DOI: 10.1111/j.1540-5982.2012.01743.x
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    Citations

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    Cited by:

    1. Emlinger, Charlotte & Poncet, Sandra, 2018. "With a little help from my friends: Multinational retailers and China's consumer market penetration," Journal of International Economics, Elsevier, vol. 112(C), pages 1-12.
    2. Horst Raff & Nicolas Schmitt, 2016. "Manufacturers and retailers in the global economy," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(2), pages 685-706, May.
    3. Eike Berner & Laura Birg & Dominik Boddin, 2017. "Retailers and Consumers: The Pass-through of Import Price Changes," The World Economy, Wiley Blackwell, vol. 40(7), pages 1314-1344, July.
    4. Meinen, Philipp & Raff, Horst, 2018. "International trade and retail market performance and structure: Theory and empirical evidence," Journal of International Economics, Elsevier, vol. 115(C), pages 99-114.
    5. Youngmin BAEK & HAYAKAWA Kazunobu & TSUBOTA Kenmei & URATA Shujiro & YAMANOUCHI Kenta, 2019. "Tariff Pass-through in Wholesaling: Evidence from Firm-level Data in Japan," Discussion papers 19064, Research Institute of Economy, Trade and Industry (RIETI).
    6. Peter Debaere & Holger Görg & Horst Raff, 2013. "Greasing the wheels of international commerce: how services facilitate firms’ international sourcing," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(1), pages 78-102, February.
    7. Emily Blanchard & Tatyana Chesnokova & Gerald Willmann, 2017. "Private labels and exports: trading variety for volume," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(3), pages 545-572, August.
    8. repec:got:cegedp:133 is not listed on IDEAS
    9. Baggs, Jen & Fung, Loretta & Lapham, Beverly, 2018. "Exchange rates, cross-border travel, and retailers: Theory and empirics," Journal of International Economics, Elsevier, vol. 115(C), pages 59-79.
    10. Alexis Antoniades & Nicola Zaniboni, 2016. "Exchange Rate Pass‐Through Into Retail Prices," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(4), pages 1425-1447, November.
    11. Baek, Youngmin & Hayakawa, Kazunobu & Tsubota, Kenmei & Urata, Shujiro & Yamanouchi, Kenta, 2021. "Tariff Pass-through in Wholesaling: Evidence from Firm-level Data in Japan✰," Journal of the Japanese and International Economies, Elsevier, vol. 62(C).
    12. Cole, Matthew T. & Eckel, Carsten, 2018. "Tariffs and markups in retailing," Journal of International Economics, Elsevier, vol. 113(C), pages 139-153.
    13. Raff, Horst & Schmitt, Nicolas, 2015. "Retailing and international trade: A survey of the literature," Economics Working Papers 2015-02, Christian-Albrechts-University of Kiel, Department of Economics.

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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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