Market structure: Concentration and imports as determinants of industry margins


  • Alejandro Castañeda Sabido El Colegio de México, A.C. & Centro de Investigación y Docencia Económicas
  • David Mulato Universidad Torcuato Di Tella



price-cost margins, import penetration, concentration, cyclical effects


The paper analyzes the determinants of price-cost margins following traditional industrial organization approaches. The price-cost margins are made function of the concentration index and the degree of import penetration. We find that imports act as a market disciplining device that reduces the price-cost margins of the domestic industry. After trade liberalization, the impact of concentration diminishes. Controlling for cyclical behavior of the price-cost margins the paper shows that cross-section studies tend to bias the estimates. A distinction between durables and non-durables is made, finding strong evidence for concentration to affect the price-cost margins of durables.


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How to Cite

Castañeda Sabido, A., & Mulato, D. (2006). Market structure: Concentration and imports as determinants of industry margins. Estudios Económicos De El Colegio De México, 21(2), 177–202.