Markups and Firm-Level Export Status
American Economic Review
vol. 102,
no. 6, October 2012
(pp. 2437-71)
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 markups 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)Citation
De Loecker, Jan, and Frederic Warzynski. 2012. "Markups and Firm-Level Export Status." American Economic Review, 102 (6): 2437-71. DOI: 10.1257/aer.102.6.2437Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- F14 Empirical Studies of Trade
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
- L60 Industry Studies: Manufacturing: General