Foreign trade, concentration and profitability in open economies

Pagoulatos, Emilio; Sorensen, Robert

doi:10.1016/0014-2921(76)90033-7

Cited by 38 publications

(15 citation statements)

References 16 publications

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“…À ce titre ils devraient être positivement corrélés non seulement à cette efficacité mais aussi à l'investissement productif et à la taille moyenne des unités de production (Jenny et Weber, 1974;Pagoulatos et Sorensen, 1976). Il est générale-ment admis en effet, que les grandes entreprises réalisent des profits supérieurs à ceux des firmes de taille plus modeste, cette plus grande profitabilité étant attribuée soit à l'existence d'un pouvoir de marché quand la concentration est forte, soit à leur plus grande efficience (Demsetz, 1974).…”

Section: Equation 4 : Les Profits Sectorielsunclassified

Commerce extérieur et disparitions d’entreprises industrielles

Hountondji

2009

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L’article se propose d’adapter et d’étendre les modèles de marges sur coûts à l’étude de la démographie des firmes industrielles. Il examine en particulier les rapports entre importations et disparitions d’entreprises, dans le cadre d’une concurrence oligopolistique à prix stables en économie ouverte. Les modèles sont construits directement en économie ouverte et n’intègrent pas la séquence habituelle du passage de l’autarcie aux échanges extérieurs : aucune référence n’est faite par conséquent aux effets de discipline du commerce extérieur. Les firmes exportatrices réagissent aux changements qui interviennent dans leurs performances sur les marchés extérieurs ou dans la pénétration du marché national, par des choix qui peuvent aller d’un effort de différenciation de leur produit (publicité) à une réduction de leurs coûts (diverses formes de relations de sous-traitance) en passant par des mouvements de stockage et de déstockage. Les disparitions de firmes industrielles représentent une des conséquences de ces choix. Les tests économétriques réalisés sur le cas français montrent que seule une catégorie particulière de disparitions d’entreprises (les cessations pures) semble déterminée par le commerce extérieur qui par conséquent n’exercerait pas d’influence significative sur l’ensemble des cessations d’entreprises.Studies on industrial demography are traditionally devoted to the prediction of corporate bankruptcy. Small business failure rates are, in this respect, related either to management considerations on a microeconomic level, or to financial and policy decisions from a macroeconomic point of view. In both cases, little attention is paid to theoretical explanations and to the specific influence of external trade on this index of industrial performance. The relationship between business failures and international trade seems obvious when holds the traditional assumptions made in the context of price cost margins models, that is to say, price and profit reductions due to import (and export) discipline. Unfortunately, empirical studies provide no unambiguous evidence of these assumptions.The aim of this paper is to propose a simultaneous equations model of oligopolistic fix-price competition in which industrial business failure rates should be explained by external trade. No reference is made to autarky or import discipline. Two kinds of firms are assumed to operate in the economy: small price taker businesses confined to the domestic market, and dominant firms able to supply on both domestic and external markets. Changes occuring in their performances on external markets or in the domestic market penetration involve a variety of choices made by dominant firms, that may be ranged from lowering their costs (by different forms of sub-contracting) to higher advertizing outlays (source of product differentiation) and changes in inventory holdings. Small business failures are analyzed as consequences of that choices.Using French industrial data (1987-1990), econometric estimations of the models show that no universa...

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Section: Equation 4 : Les Profits Sectorielsunclassified

Commerce extérieur et disparitions d’entreprises industrielles

Hountondji

2009

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“…Estimates of its effect on profit margins are, however, rarely concordant and often contradictory. 3 In the 3 A fine example of conflicting estimates of the impact of exports is given by Pagoulatos and Sorenson (1976). Their Table 1 reports a negative influence of exports on the price-cost margin in manufacturing for four EC countries: Belgium, France, Italy, and Germany, whereas a positive influence is reported for The Netherlands.…”

Section: International Tradementioning

confidence: 99%

“…Imported goods constitute a source of competition only in so far as they are imported by other market participants. Accordingly, we expect the influence of the import intensity to be positive and that of competing imports to be negative (cf Esposito and Esposito, 1971;Khalilzadeh-Shirazi, 1974;Pagoulatos and Sorenson, 1976;Marvel, 1980;and Hutchinson, 1981;see Caves, 1985 for a survey). Furthermore, the influence of competing imports can be assumed to depend on the competitive structure of home markets.…”

Section: International Tradementioning

confidence: 99%

Wholesale pricing in a small open economy

Dalen

Thurik

1995

De Economist

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“…Empirical results of the influences of exports are contradictory too: positive as well as negative effects of exports on price-cost margins are found. See, for example, Pagoulatos and Sorensen (1976) in which inconsistent effects of exporting activities are found in several EC-countries.…”

Section: Internationaltradementioning

confidence: 99%

“…16 See for example, Khalilzadeh-Shirazi (1974), Pagoulatos andSorenson (1976), andPugel (1980). 17 In Prince and Thurik (1990) it is shown that exports do affect Dutch manufacturing price-cost margins positively for producer goods industries, but negatively for consumer goods industries.…”

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confidence: 99%

Firm-size distribution and price-cost margins in Dutch manufacturing

Prince

Thurik

1993

Small Bus Econ

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ABSTRACT. Industrial economists surmise a relation between the size distribution of firms and performance. Usually, attention is focused on the high end of the size distribution. The widely used four-firm seller concentration ratio, C4, ignores what happens at the low end of the size distribution.We investigate to what extent the level and the growth of small business presence influence price-cost margins in Dutch manufacturing. We use a large data set of 66 industries for a thirteen year period. This allows the investigation of both small business influences within a framework in which that of many other market structure variables is also studied. Evidence is shown that price-cost margins are influenced by large firm dominance, growth in small business presence, capital intensity, business cycle, international trade and buyer con-" centration.

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Foreign trade, concentration and profitability in open economies

Cited by 38 publications

References 16 publications

Commerce extérieur et disparitions d’entreprises industrielles

Commerce extérieur et disparitions d’entreprises industrielles

Wholesale pricing in a small open economy

Firm-size distribution and price-cost margins in Dutch manufacturing

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