Markups and exporting behavior of foreign affiliates

Hongyong Zhang and Lianming Zhu

Journal of Comparative Economics, 2017, vol. 45, issue 3, 445-455

Abstract: This study investigates the effect of exporting on markups for firms in China with a focus on foreign affiliates. Firm markups are first recovered after correcting for both output and input price biases. The analysis reveals that exporters which are affiliates of foreign firms charge, on average, lower markups in their export pricing. The markups are decomposed into price and marginal cost components to show that although exporting increases both price and marginal cost, the price increases are small relative to the increases in marginal cost. Heterogeneous effects of exporting on markups across firms and location are also examined.

Keywords: Markups; Export; Foreign firms; Firm productivity (search for similar items in EconPapers)
JEL-codes: D21 D24 F14 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:45:y:2017:i:3:p:445-455

DOI: 10.1016/j.jce.2016.11.001

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