Mark-up and Cost Dispersion across Firms: Direct Evidence from Producer Surveys in Pakistan

Eric Verhoogen, ,, David Atkin, Azam Chaudhry and Shamyla Chaudry
Authors registered in the RePEc Author Service: Amit Khandelwal

No 10366, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Researchers typically invoke theoretical assumptions to estimate mark-ups. Instead, we directly obtain mark-ups by surveying Pakistani soccer-ball producers. We document six facts: (1) Mark-ups are more dispersed than costs; (2) Mark-ups and costs increase with firm size; (3) The mark-up elasticity with respect to size exceeds the cost elasticity; (4) Costs increase with size because larger firms use higher-quality inputs; (5) Larger firms charge higher mark-ups because they have higher production shares of high-quality balls that carry higher mark-ups, and because they charge higher mark-ups conditional on ball type; (6) Correlations suggest marketing efforts are important for generating higher mark-ups.

Keywords: Costs; Markups; Soccer balls (search for similar items in EconPapers)
JEL-codes: F12 L11 O14 (search for similar items in EconPapers)
Date: 2015-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

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Related works:
Journal Article: Markup and Cost Dispersion across Firms: Direct Evidence from Producer Surveys in Pakistan (2015)
Working Paper: Mark-up and Cost Dispersion across Firms: Direct Evidence from Producer Surveys in Pakistan (2015)
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