Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/194219
Authors: 
Damoah, Kaku Attah
Year of Publication: 
2018
Series/Report no.: 
FIW Working Paper No. 184
Abstract: 
This paper investigates the impact of Ghana's WTO accession on firm-level product and labour market imperfections. We exploit a rich dataset of firm-level information to estimate both markups and the degree of monopsony power enjoyed by manufacturing firms. Results suggest that price-cost margins declined, while the degree of monopsony power increased in the wake of WTO accession. These diverging dynamics suggests that firms compress real wages to offset loss of market power in the product market due to increased international competition. This results in an increase of the market imperfection gap, which gradually erodes the pro-competitive gains from trade. The paper contributes to the literature by identifying channels through which allocative inefficiencies and misallocation can persist even after trade liberalisation.
Subjects: 
Markups
Market Imperfections
Trade Openness
Africa
Ghana
JEL: 
F13
L11
O14
O24
Document Type: 
Working Paper

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