Department of Economics and Business Economics

Markups and Exporting Behavior

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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 be- tween 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.
Original languageEnglish
JournalAmerican Economic Review
Volume102
Issue6
Pages (from-to)2437-2471
ISSN0002-8282
DOIs
Publication statusPublished - Oct 2012

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