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Journal Articles Applied Economics Year : 2016

Margin rate and the cycle: the role of trade openness

Abstract

Using three datasets of French manufacturing firms, this article studies the role of trade openness, in relation with the cycle, as a determinant of company margin rate. Margin rates increase as capacity utilization tightens (and vice versa), reflecting the procyclicality of margin rates. However, high import rates are limiting this procyclicality: when capacities are tight, domestic producers may not be able to serve demand, but foreign producers may substitute for them if they are already present on the market as reflected by the level of import rates.

Dates and versions

hal-03563434 , version 1 (09-02-2022)

Identifiers

Cite

Gilbert Cette, Rémy Lecat, Ahmed Ould Ahmed Jiddou. Margin rate and the cycle: the role of trade openness. Applied Economics, 2016, 48 (37), pp.3569-3575. ⟨10.1080/00036846.2016.1142655⟩. ⟨hal-03563434⟩
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