Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/92797 
Year of Publication: 
2010
Series/Report no.: 
ISER Discussion Paper No. 797
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
This paper examines the relationship between firms' productivity improvement and the volume of exports, and shows that it can be sometimes negative. Specifically, we simultaneously take into account intermediate retailers (i.e., vertically) and multimarket linkages (i.e., horizontally). We find that an improvement of the manufacturing productivity affects the bargained wholesale prices in opposite directions in asymmetric markets, causing retailers to make corresponding changes that look surprising. This result can explain for the empirical productivity puzzle found in Ghemawat et al. (2010). Related to this issue is the relationship between buyer power (caused by a retail merger) and profitability. Contrary to the existing literature, in an extended setup, we find that the merger between the downstream duopolists does not improve their profits if their bargaining power is strong vs. upstream suppliers.
Subjects: 
Vertical Structure
Market power
Productivity
Multi-Market Bargaining
JEL: 
L12
L14
F12
F23
Document Type: 
Working Paper

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