arXiv subjects

Morlacco Monica

Publications and source records attributed to Morlacco Monica.

2 recordsLinked to original sources

arXiv2026

Two-Sided Market Power in Firm-to-Firm Trade

We develop and estimate a model of two-sided market power to study tariff pass-through in firm-to-firm trade. A tariff moves the negotiated price through two channels: the bilateral markup, set by bargaining, and the supplier's marginal cost, which falls alongside quantities under decreasing returns. The same decreasing returns give concentrated buyers rents to bargain over, so prices fall with the buyer's share of its supplier's output. Using U.S. customs data, we estimate substantial importer bargaining power and steep export supply. Within continuing relationships, suppliers absorb about 30 percent of the 2018 tariffs, primarily through lower marginal costs as demand contracts.

econ.GN↗

arXiv2025

Concentration and Markups in International Trade

This paper derives a closed-form expression linking aggregate markups on imported inputs to concentration in a model of firm-to-firm trade with two-sided market power. Our theory extends standard oligopoly insights in two dimensions. First, it reveals that markups increase with exporter concentration and decrease with importer concentration, reflecting the balance of oligopoly and oligopsony forces. Second, it adapts conventional market definitions to reflect rigid trading relationships, yielding new concentration measures that capture competition in firm-to-firm trade. Analysis of Colombian transaction-level import data shows these differences are key to understanding markup dynamics in international trade.

econ.TH↗