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Full-Text Articles in Industrial Organization
Exchange Rates And Export Structure, Wen-Tai Hsu, Yi Lu, Yingke Zhou
Exchange Rates And Export Structure, Wen-Tai Hsu, Yi Lu, Yingke Zhou
Research Collection School Of Economics
This paper studies whether changes in the exchange rate affect a country’s export structure, using an arguably exogenous sudden appreciation of renminbi on July 21, 2005 as the main source of identification. Employing combined regression discontinuity and difference-in-differences approach, we show that China’s export structure became more similar to that of the developed countries after the currency appreciation. We also find that the majority of the appreciation effect comes from the inter-firm resource reallocation rather than the inter-region or intra-firm resource reallocation.
Number Of Firms And Price Competition, Kyle Bagwell, Gea Myoung Lee
Number Of Firms And Price Competition, Kyle Bagwell, Gea Myoung Lee
Research Collection School Of Economics
The relationship between the number of firms and price competition is a central issue in economics. To explore this relationship, we modify Varianís (1980) model and assume that firms are privately informed about their costs of production. Allowing that the support of possible cost types may be large, we show that an increase in the number of firms induces lower (higher) prices for lower-cost (highercost) firms. We also characterize the pricing distribution as the number of firms approaches infinity, finding that the equilibrium pricing function converges to the monopoly pricing function for all but the lowest possible cost type. If …