Markups and Pass-through along the Supply Chains

Takafumi Kawakubo and Takafumi Suzuki

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: The rising trend in markups documented in the United States and many other countries posed concerns in recent decades. This paper estimates firm-level markups using Japanese data during 2000--2021. First, we find that the markups overall have barely changed in the past 20 years. However, when we restrict the sample to the manufacturing sector, the markups decreased between 2000 and 2009 and increased between 2010 and 2021. There appears to be little change over the period of COVID-19. Second, we additionally exploit firm-level buyer-supplier linkage information to study the relationship between buyer and supplier markups. Our findings show that there is positive and significant correlation between markups of firms on both sides of the transactions. This result suggests the potential pass-through of prices along the supply chains.

Pages: 42 pages
Date: 2024-07
New Economics Papers: this item is included in nep-com, nep-ind and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:24068

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