Markups and markdowns

Mauro Caselli, Stefano Schiavo () and Lionel Nesta
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Stefano Schiavo: UNITN - Università degli Studi di Trento = University of Trento

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Abstract: This paper studies the high yet undocumented incidence of firms displaying markups lower than unity, i.e., prices lower than marginal costs, for protracted periods of time. Using a large sample of French manufacturing firms for the period 1990-2007, the paper estimates markups at the firm level and documents in a robust way the extent to which firms exhibit negative price-cost margins. The paper also investigates the relationship between the incidence and persistence of negative price-cost margins and candidate explanations, such as subsidies, strategic behaviour, uncertainty and irreversibility.

Date: 2018
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Published in Economics Letters, 2018, 173, pp.104-107. ⟨10.1016/j.econlet.2018.09.026⟩

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Related works:
Journal Article: Markups and markdowns (2018)
Working Paper: Markups and markdowns (2018)
Working Paper: Markups and markdowns (2018)
Working Paper: Markups and markdowns (2017)
Working Paper: Markups and markdowns (2017)
Working Paper: Markups and markdowns (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:halshs-01948190

DOI: 10.1016/j.econlet.2018.09.026

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