 Increasing Market Power in Slovenia: Role of Diverging Trends between Exporters and NonexportersJoze Damijan, Jozef Konings and Aigerim Yergabulova No 202002, Working Papers from University of Liverpool, Department of Economics Abstract: This paper documents the evolution of markups in a small open economy, Slovenia, using a comprehensive dataset covering the full population of firms. It makes three novel contributions to the literature. First, in contrast to other work for Europe, we find that markups have increased from 1.05 to 1.19 between 1994 and 2015. Second, while other research so far found exporters typically to have higher markups, we find the opposite in Slovenia. Though the rise in markups occurs both with exporters and non-exporters, there is a consistent diverging trend in markups in favor of nonexporters since 1999. This can be attributed to increased competitive pressure faced by exporters following the increased participation in global value chains. Third, we decompose aggregate markups and show that the increase in markups, for both exporters and non-exporters, is mainly driven by the within component rather than the reallocation effect. This suggests that all firms were increasing their markups, rather than high markup firms increasing their market share over time. Pages: 26 pages Forthcoming Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:liv:livedp:202002 Access Statistics for this paper More papers in Working Papers from University of Liverpool, Department of Economics Contact information at EDIRC. |
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