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Economic integration, market discipline and productivity growth in Spain

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  • Diego Mendez-Carbajo
  • Dimitrios Thomakos

Abstract

This paper explores the changes on productivity growth, economies of scale and market discipline experienced by a selected number of Spanish manufacturing industries as a result of the 1986 - 92 integration of Spain into the European Union. Since the intra-union trade liberalization process spanned a seven-year, multi-stage, adhesion period we employ a model with a smooth transition variable to account fully for its impact. An additional model that uses separate sets of dummy variables captures differences in the regression estimates during the transitional and liberalized periods. In both model specifications we find strong evidence of increases in returns to scale and reductions in producers' mark-ups, whereas productivity growth increases are found to be small and uneven.

Suggested Citation

  • Diego Mendez-Carbajo & Dimitrios Thomakos, 2003. "Economic integration, market discipline and productivity growth in Spain," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 12(4), pages 359-375.
    • Handle: RePEc:taf:jitecd:v:12:y:2003:i:4:p:359-375
    DOI: 10.1080/0963819032000154801
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    References listed on IDEAS

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