Globalization and Market Power

Q: What does this research mean for the field?

Trade liberalization reduces firm-level and aggregate markups, but this pro-competitive effect is weaker for firms with high intangible investments and is primarily driven by changes at the intensive margin rather than reallocation. Novelty: ClaimNovelty.CONFIRMATORY. Consensus alignment: ConsensusAlignment.SUPPORTS_CONSENSUS.

Giammario Impullitti; Fahad Kazmi

doi:10.1111/roie.70063

August 17, 2026Review of International EconomicsOpen Access

Globalization and Market Power

View Full Paper

Ask AI

Bookmark

Share

Key Points

To examine how trade liberalization influences firm-level and aggregate markups through various economic mechanisms.
Analyzed an episode of trade liberalization in Spain characterized by reductions in import tariffs.
Evaluated transmission mechanisms connecting trade policy to markups, focusing on intangible capital investment and cross-firm reallocation.
Import tariff reductions generated pro-competitive decreases in both firm-level and aggregate markups.
Firms with higher intangible investment experienced significantly smaller reductions in markups, supporting the market concentration channel.
Trade-driven markup adjustments operated predominantly through intensive-margin shifts within individual firms rather than reallocation across firms.

Implication

Empirical analysis demonstrates pro-competitive effects of tariff reductions on markups in Spanish firms, indicating intangible investments buffer market power against trade shocks.

Discussion

No takes yet. Share an insight, caveat, or question.

Cite This Study

Impullitti et al. (2026) studied this question.

synapsesocial.com/papers/6a8562eb03308d306e2d5d67 https://doi.org/10.1111/roie.70063

View Full Paper

Ask AI

Bookmark

Share

Globalization and Market Power

Key Points

Implication

Discussion

Cite This Study

Globalization and Market Power

Key Points

Implication

Discussion

Cite This Study

Keep reading

Keep reading