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Antitrust policies and profitability in non-tradable sectors

Besley, Timothy, Fontana, Nicola and Limodio, Nicola (2021) Antitrust policies and profitability in non-tradable sectors. American Economic Review: Insights, 3 (2). 251 - 265. ISSN 2640-2068

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Identification Number: 10.1257/aeri.20200316


Firms in tradable sectors are more likely to be subject to external competition to limit market power, while nontradable firms are more dependent on domestic policies and institutions. This paper combines an antitrust index available for multiple countries with firm-level data from Orbis covering more than 12 million firms from 94 countries, including 20 sectors over 10 years and finds that profit margins of firms operating in nontradable sectors are significantly lower in countries with stronger antitrust policies compared to firms operating in tradable sectors. The results are robust to a wide variety of empirical specifications.

Item Type: Article
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Additional Information: © 2021 American Economic Association
Divisions: Economics
School of Public Policy
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Geography & Environment
Subjects: H Social Sciences > HG Finance
H Social Sciences > HB Economic Theory
JEL classification: L - Industrial Organization > L4 - Antitrust Issues and Policies > L44 - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
Date Deposited: 04 Sep 2020 13:03
Last Modified: 16 May 2024 03:10

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