Effect of International Competition on Firm Productivity and Market Power

June 2016
Forthcoming in Oxford Handbook of Productivity Analysis (Oxford: Oxford University Press)

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We put forward a framework to evaluate the potential impact of international competition on firm performance, and we highlight two points. First, it is important to consider effects on productive efficiency and market power in an integrated framework. Second, greater international competition enlarges the relevant market and can affect both the set and type of competitors a firm faces, as well as the nature of competition. We contrast three estimation approaches that start, respectively, from the demand side, the product extensive margin, and the production side. We conclude with a few avenues for future research