The Dynamics of Price Cost Margins: Evidence from UK Manufacturing

Görg, Holger; Warzynski, Frédéric

doi:10.3917/reof.073.0303

New Directions in Productivity Analysis

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Vous consultezThe Dynamics of Price Cost Margins: Evidence from UK Manufacturing

AuteursHolger Görg du même auteur

Leverhulme Centre for Research on Globalisation and Economic Policy, University of Nottingham, United Kingdom

Frederic Warzynski du même auteur

Universidad Carlos III de Madrid and Aarhus School of Business

Résumé

This paper estimates the dynamics of price cost margins in UK manufacturing over the period 1989-1997 and links it to the implementation of the Single Market Program. Using the Hall-Roeger methodology, we find a dramatic decline in price cost margins by 25% after 1990. This suggests that firms anticipated the competitive shock induced by the Single Market Program, which created a more competitive environment.
JEL Classification: F1, L1, L6.

Keywords
single market program, price cost margins, UK, firm-level data

PLAN DE L'ARTICLE

1 - Introduction

2 - Methodology
- 2.1 - Seminal work (Hall, 1986, 1988; Domowitz et al., 1988)
- 2.2 - Coping with endogeneity and time varying parameters
3 - Dataset
4 - Results
- 4.1 - The dynamics of average price cost margins
- 4.2 - Price cost margins by industry
- 4.3 - Cyclicality and SMP effect
5 - Discussion and Conclusion

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