Tariffs and markups in retailing

• 成果类型: Article
• 署名作者: Cole, Matthew T.; Eckel, Carsten
• 署名单位: California State University System; California Polytechnic State University San Luis Obispo; University of Munich; Leibniz Association; Ifo Institut
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2018.04.009
• 发表日期: 2018
• 页码: 139-153
• 关键词: Variable markups; Retailing; Trade policy

摘要

Tariffs on imported products are typically expected to raise the relative price of foreign goods and, as a result, increase the residual demands of domestic substitutes. In this paper we show, more generally, that these changes in wholesale/manufacturing prices can be offset and even dominated by adjustments in retail markups. Retailers have an incentive to charge the highest markups on the lowest-cost products and to adjust the markups on these products most actively. Thus, if the procurement costs of some foreign products rise, retailers will absorb these cost increases by raising prices relatively more on their relatively more efficient products, thereby mitigating the benefits of a protectionist tariff. We show that this effect can dominate the traditional substitution effect, which highlights the need to better understand the role of retailers in trade policy. (C) 2018 Elsevier B.V. All rights reserved.