Market Organization and Propagation of Shocks: The Furniture Industry in Germany and Italy

In this paper we study the furniture industry in two European countries, Germany and Italy. Although the two industries are characterized by very similar output and technology, they differ widely in terms of market organization, most notably the distribution of firms by size, and the organization of retail. We find some evidences that these differences have an influence on the dynamic behavior of industry output, prices and exports in the two countries.