We draw on trade theory to empirically explore the effects of value chain integration on producer price dynamics. Using the
EU as an example of an integrated area, we construct measures of backward and forward linkages with intra‐ and extra‐EU trading
partners at the country‐sector level. We find that especially upstream integration and EU accession dampen inflation. The
results for downstream integration indicate a price‐increasing relationship. We propose novel EU integration indicators and
offer insights to both theory and applied research. We also add to the policy debate on the price effects of (dis‐)integration
of EU countries.
This paper studies how the integration into a deep Regional Trade Agreement affects sector level productivity. Using the EU
as an example, we construct an integration indicator that measures integration into the Single Market relative to global value
chains. The results of a simultaneous equation model show an overall positive effect of integration on labour productivity,
which is driven by upstream integration. Market distortions in regional value chains accumulate downstream and negatively
affect productivity. Better domestic institutions facilitate the integration process at the industry level for both Member
States and Non-Member States. Then again, better institutions seem to be more favourable to the integration of industries
with less complex product portfolios and lower levels of knowledge cumulativeness.
The empirical literature on mergers, market power and cooperation in differentiated markets has mainly focused on methods
relying on output and/or panel data. In contrast to this literature we propose an approach to analyse cooperative behaviour
among a group of firms only by making use of information on the spatial structure of a horizontally differentiated market.
Using spatial econometrics techniques we focus on differences in the pricing behaviour between different groups of firms,
i.e., alliance and stand-alone firms. We apply this method to the market for ski lift tickets using a unique data set on ticket
prices and detailed resort-specific characteristics covering all ski resorts in Austria. We show that prices of ski resorts
forming alliances are higher and increase with the size and towards the spatial center of an alliance. Interaction in pricing
is higher within than outside alliances. All results are in line with the findings of theoretical models on non-competitive
pricing behaviour in horizontally differentiated markets.
A popular argument in policy discussions on the liberalisation of business hours proceeds on the assumption that business
hours are strategic complements: if some firms open longer hours, competitors will be forced to extend their opening hours
too. We provide first empirical evidence on the impact of competition and the form of strategic interaction in business hours
between firms by using detailed information on business hours as well as the location of retail gasoline stations in Austria.
Our findings reject the presumption of business hours being strategic complements. Firms tend to have longer opening hours
in a more competitive environment.