Ratio Working Papers
Effects of Trade Liberalization on Domestic Prices: Some Evidence from Tunisian Manufacturing
(), Almas Heshmati
() and Mohamed Adel Dhif
Abstract: This paper presents estimates of the competitive effects
of trade liberalization on domestic pricing behaviour of Tunisian
manufacturing industries. The theoretical framework is based on a dynamic
flexible adjustment model of price determination in a small open economy.
It investigates the process of adjustment in price level toward a desired
level. The adjustment process is both industrial and time-specific. The
empirical results show that, in the long run, domestic price responds
greatly to import penetration, followed by demand pressure. There was a
negative effect from import competition on domestic price. Trade policy is
a viable policy option to promote competitiveness.
Keywords: dynamic model; domestic price; trade liberalization; panel data; speed of adjustment; Tunisia; (follow links to similar papers)
JEL-Codes: C33; E31; F14; L60; (follow links to similar papers)
31 pages, April 25, 2006
Before downloading any of the electronic versions below
you should read our statement on
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
Questions (including download problems) about the papers in this series should be directed to Martin Korpi ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Design by Joachim Ekebom