Price Markups and Upstreamness in World Input-Output Data

Colonescu Constantin ()
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Colonescu Constantin: MacEwan University, Department of Economics

Acta Universitatis Sapientiae, Economics and Business, 2021, vol. 9, issue 1, 71-85

Abstract: This research uses the publicly available World Input-Output Database (WIOD) to investigate the relationship between an industry’s markup and its upstreamness, the industry’s position in the vertical chain of production; the research also identifies common attributes among high-markup industrial sectors: higher-markup industries display a higher level of capital compensation and a lower share of labour and other inputs in the value of output. Finally, it is found that upstream industries, those producing mostly raw materials and intermediate products enjoy higher market power than their downstream counterparts. This result could be among the first in the literature to find evidence of double marginalization at an industry level of aggregation. It also suggests that virtually all final product prices may incorporate substantial markups through their inputs.

Keywords: world input-output table; price markup; upstreamness (search for similar items in EconPapers)
JEL-codes: D24 D42 L11 L12 L41 L42 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:vrs:auseab:v:9:y:2021:i:1:p:71-85:n:1

DOI: 10.2478/auseb-2021-0004

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