Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/223584
Authors: 
Chung, Wanyu
Perroni, Carlo
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper 8512
Abstract: 
We study how domestic content requirements in Free Trade Areas (FTAs) affect market power and market structure in concentrated intermediate goods markets. We show that content requirements increase oligopolistic markups beyond the level that would obtain under an equivalent import tariff, and we document patterns in Canadian export data and US producer price data that align with the model’s predictions: producers of intermediate goods charge comparatively higher prices when the associated final goods producers are more constrained by FTA origin requirements and by Most Favoured Nation (MFN) tariffs for both intermediate and final non-FTA goods.
Subjects: 
free trade areas
content requirements
market power
JEL: 
F12
F13
F14
D43
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.