Market integration and convergence to the Law of One Price: evidence from the European car market

• 成果类型: Article
• 署名作者: Goldberg, PK; Verboven, F
• 署名单位: Yale University; National Bureau of Economic Research; KU Leuven
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2003.12.002
• 发表日期: 2005
• 页码: 49-73
• 关键词: International price dispersion; Law of one price; market integration; Price convergence; European automobile market

摘要

This paper exploits the unique case of European market integration to investigate the relationship between integration and price convergence in international markets. Using a panel data set of car prices, we examine how the process of integration has affected cross-country price dispersion in Europe. We find surprisingly strong evidence of convergence towards both the absolute and the relative versions of the Law of One Price (LOOP). Our analysis illuminates the main sources of segmentation in international markets and suggests the type of institutional changes that can successfully reduce it. (C) 2004 Elsevier B.V. All rights reserved.