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.
single market program
price cost margins
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