Markets and Markup: A New Empirical Framework and Evidence on Exporters from China

Meredith Crowley, Giancarlo Corsetti, Lu Han and Huasheng Song

No 13904, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Firms that dominate global trade export to multiple countries and frequently change their foreign destinations. We develop a new empirical framework for analysing markup elasticities to the exchange rate in this environment. The framework embodies a new estimator of these elasticities that controls for endogenous market participation and a new classification of products based on Chinese linguistics to proxy for firms' power in local markets. Applying this framework to Chinese customs data, we document significant pricing-to-market for highly differentiated goods. Measured in the importer's currency, the prices of highly differentiated goods are far more stable than those of less differentiated products.

Keywords: exchange rate; Markup elasticity; Pricing-to-market; Trade pattern; Product classification; Differentiated goods; China (search for similar items in EconPapers)
JEL-codes: F14 F31 F41 (search for similar items in EconPapers)
Date: 2019-08
New Economics Papers: this item is included in nep-int, nep-opm and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://cepr.org/publications/DP13904 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Markets and Markups: A New Empirical Framework and Evidence on Exporters from China (2018)
Working Paper: Markets and markups: a new empirical framework and evidence on exporters from China (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:13904

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP13904

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().