Antitrust Policies and Profitability in Nontradable Sectors
- (pp. 251-65)
Abstract
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.Citation
Besley, Timothy, Nicola Fontana, and Nicola Limodio. 2021. "Antitrust Policies and Profitability in Nontradable Sectors." American Economic Review: Insights, 3 (2): 251-65. DOI: 10.1257/aeri.20200316Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- E02 Institutions and the Macroeconomy
- L44 Antitrust Policy and Public Enterprises, Nonprofit Institutions, and Professional Organizations