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Unraveling Firms: Demand, Productivity and Markups Heterogeneity

Emanuele Forlani (), Ralf Martin (), Giordano Mion () and Mirabelle Muûls ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: We develop a new econometric framework that simultaneously allows recovering heterogeneity in demand, TFP and markups across firms while leaving the correlation among the three unrestricted. We do this by systematically exploiting assumptions that are implicit in previous firm-level productivity estimation approaches. We use Belgian firms production data to quantify TFP, demand and markups and show how they are correlated among them, across time and with measures obtained from other approaches. We also show to what extent our three dimensions of heterogeneity allow us to gain deeper and sharper insights on two key firm-level outcomes: export status and size.

Keywords: demand; productivity; markups; production function estimation; export status; firm size (search for similar items in EconPapers)
JEL-codes: D24 L11 L25 F14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec and nep-eff
Date: 2016-01
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http://cep.lse.ac.uk/pubs/download/dp1402.pdf (application/pdf)

Related works:
Working Paper: Unraveling Firms: Demand, Productivity and Markups Heterogeneity (2016) Downloads
Working Paper: Unraveling Firms: Demand, Productivity and Markups Heterogeneity (2016) Downloads
Working Paper: Unraveling firms: demand, productivity and markupsheterogeneity (2016) Downloads
Working Paper: Unraveling firms: Demand, productivity and markups heterogeneity (2016) Downloads
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