IDEAS home Printed from https://ideas.repec.org/a/bla/coecpo/v15y1997i3p93-102.html
   My bibliography  Save this article

Effect Of Multi‐Fiber Arrangement Trade Restrictions On Textile Industry Profit Margins

Author

Listed:
  • PENG XU

Abstract

This article tests the anti‐competitive effect of trade restrictions under the Multi‐Fiber Arrangement in the U.S. textile industry. The modeling approach differs from that of traditional empirical studies. That is, it allows for non‐competitive behavior by domestic firms and therefore permits estimating the effect of trade policy on domestic firms' conduct, market power, and profit margins. The model is estimated for several selected product categories of the U.S. textile industry. Empirical results indicate that trade restrictions enabled domestic producers to behave less competitively and raise their profit margins. The empirical evidence is significant in the man‐made fiber sub‐sectors. The anti‐competitive effect, however, tended to taper off over time, suggesting that higher profits might have induced new entry and hence boosted competition.

Suggested Citation

  • Peng Xu, 1997. "Effect Of Multi‐Fiber Arrangement Trade Restrictions On Textile Industry Profit Margins," Contemporary Economic Policy, Western Economic Association International, vol. 15(3), pages 93-102, July.
    • Handle: RePEc:bla:coecpo:v:15:y:1997:i:3:p:93-102
    DOI: 10.1111/j.1465-7287.1997.tb00481.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1465-7287.1997.tb00481.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1465-7287.1997.tb00481.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Morrison, Catherine J, 1988. "Quasi-Fixed Inputs in U.S. and Japanese Manufacturing: A Generalized Leontief Restricted Cost Function Approach," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 275-287, May.
    2. Levinsohn, James, 1993. "Testing the imports-as-market-discipline hypothesis," Journal of International Economics, Elsevier, vol. 35(1-2), pages 1-22, August.
    3. Gary Clyde Hufbauer & Kimberly Ann Elliott, 1994. "Measuring the Costs of Protection in the United States," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 77, April.
    4. repec:bla:econom:v:43:y:1976:i:171:p:267-74 is not listed on IDEAS
    5. Appelbaum, Elie, 1982. "The estimation of the degree of oligopoly power," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 287-299, August.
    6. Jeffrey J. Schott, 1994. "Uruguay Round: An Assessment," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 64, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Catherine J. Morrison, 1989. "Markup Behavior in Durable and Nondurable Manufacturing: A production Theory Approach," NBER Working Papers 2941, National Bureau of Economic Research, Inc.
    2. Kurt Kratena, 2005. "Prices and factor demand in an endogenized input-output model," Economic Systems Research, Taylor & Francis Journals, vol. 17(1), pages 47-56.
    3. Feenstra, Robert C., 1995. "Estimating the effects of trade policy," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 30, pages 1553-1595, Elsevier.
    4. Henry Nieuwenhuijsen & Gerrit de Wit & Frank Hindriks, 2000. "Comparative advantages in estimating markups," Scales Research Reports H200003, EIM Business and Policy Research.
    5. William R. Cline, 1995. "Evaluating the Uruguay Round," The World Economy, Wiley Blackwell, vol. 18(1), pages 1-23, January.
    6. Rigoberto A. Lopez & Elena Lopez, 2003. "The impact of imports on price-cost margins: An empirical illustration," Empirical Economics, Springer, vol. 28(2), pages 403-416, April.
    7. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2005. "Short‐term Consequences of Trade Reform for Industry Employment and Wages: Survey of Evidence from Colombia," The World Economy, Wiley Blackwell, vol. 28(7), pages 923-939, July.
    8. Lahcen ACHY & Azzeddine AZZAM & Khalid SEKKAT, 2009. "Coping With Data Limitations When Measuring Oligopoly Power In A Developing Country," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 9(2).
    9. Akbar Ullah & Ejaz Ghani & Attiya Y. Javed, 2013. "Market Power and Industrial Performance in Pakistan," PIDE-Working Papers 2013:88, Pakistan Institute of Development Economics.
    10. Craig Gallet, 2001. "The Gradual Response of Market Power to Mergers in the U.S. Steel Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 18(3), pages 327-336, May.
    11. Brissimis, Sophocles N. & Delis, Manthos D., 2011. "Bank-level estimates of market power," European Journal of Operational Research, Elsevier, vol. 212(3), pages 508-517, August.
    12. Mary Amiti & Jozef Konings, 2007. "Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 97(5), pages 1611-1638, December.
    13. James R. Tybout, 2000. "Manufacturing Firms in Developing Countries: How Well Do They Do, and Why?," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 11-44, March.
    14. Bas, Maria & Paunov, Caroline, 2021. "Disentangling trade reform impacts on firm market and production decisions," European Economic Review, Elsevier, vol. 135(C).
    15. Lee, Myunghun, 2011. "Measurement of market power for the environmentally regulated Korean iron and steel manufacturing industry," Resources Policy, Elsevier, vol. 36(3), pages 249-254, September.
    16. Martinez-Budria, Eduardo & Diaz-Hernandez, Juan Jose & Jara-Däaz, Sergio, 2011. "Productivity and efficiency with discrete variables and quadratic cost function," International Journal of Production Economics, Elsevier, vol. 132(2), pages 251-257, August.
    17. Chrysovalantis Amountzias, 2018. "The Effects of Competition, Liquidity and Exports on Markups: Evidence from the UK Food and Beverages Sector," Journal of Industry, Competition and Trade, Springer, vol. 18(2), pages 187-208, June.
    18. Kenneth L. Judd, 2002. "Capital-Income Taxation with Imperfect Competition," American Economic Review, American Economic Association, vol. 92(2), pages 417-421, May.
    19. Joeé Emilio Boscá & Francisco Javier Escribá & María José Murgui, 2002. "The Effect of Public Infrastructure on the Private Productive Sector of Spanish Regions," Journal of Regional Science, Wiley Blackwell, vol. 42(2), pages 301-326, May.
    20. Jozef Konings & Patrick Van Cayseele & Frédéric Warzynski, 2010. "The Implementation of National Competition Policy Law and the Dynamics of Price–Cost Margins: Evidence from Belgium and the Netherlands 1993–1999," Chapters, in: Jean-Luc Gaffard & Evens Salies (ed.), Innovation, Economic Growth and the Firm, chapter 9, Edward Elgar Publishing.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:coecpo:v:15:y:1997:i:3:p:93-102. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.