| Author(s): |
PhDr. Jiří Schwarz Ph.D.,
|
| Type: |
IES Working Papers |
| Year: |
2011 |
| Number: |
30 |
| ISSN / ISBN: |
|
| Published in: |
IES Working Papers 30/2011 |
| Publishing place: |
Prague |
| Keywords: |
border effect, price dispersion, price convergence, law of one price, institutional quality |
| JEL codes: |
D23, E31, F41, L26 |
| Suggested Citation: |
Schwarz, J. (2011). “Impact of Institutions on Cross-Border Price Dispersion” IES Working Paper 30/2011. IES FSV. Charles University. |
| Abstract: |
This paper analyzes the role of institutions in price dispersion among cities in the European region in the 1996-2009 period. An overview of the literature on the border effect reveals that the role of institutions is completely neglected. Using the Worldwide Governance Indicators as explanatory variables I find that the better the institutions, the lower the predicted dispersion. The result is robust to different specifications of the regression model and it is consistent with a hypothesis that arbitrage, as an entrepreneurial activity and the main power behind the law of one price, is influenced by institutional quality. |
| Downloadable: |
WP 2011_30_Schwarz
|
