American Economic Review· 2012Q1
Markups and Firm-Level Export Status
- 1,401citations
- Q1SCImago
- 2012year
Short summary
A new method using plant-level production data estimates significantly higher markups when controlling for unobserved productivity, finding that exporters charge higher markups and increase them upon export entry.
AI-generated from the title and abstract; the full text is not read.
Key points
- Developed a method to estimate plant-level markups using production data, assuming cost-minimizing producers and a variable input.
- The method estimates markups without needing to specify the firm's product market competition.
- Markups are estimated significantly higher when unobserved productivity is controlled for.
- Exporters charge, on average, higher markups than non-exporters.
- Markups increase for firms upon entering export markets.
AI-generated from the title and abstract; the full text is not read.
Abstract
In this paper, we develop a method to estimate markups using plant-level production data. Our approach relies on cost-minimizing producers and the existence of at least one variable input of production. The suggested empirical framework relies on the estimation of a production function and provides estimates of plant-level mark-ups without specifying how firms compete in the product market. We rely on our method to explore the relationship between markups and export behavior. We find that markups are estimated significantly higher when controlling for unobserved productivity; that exporters charge, on average, higher markups and that markups increase upon export entry. (JEL D22, D24, F14, L11, L60)
The authors' abstract, as published at the source. American Economic Review, 2012 · DOI ↗
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Field: General Economics, Econometrics and Finance
General Economics, Econometrics and FinanceEconomics, Econometrics and Finance