Why do within firm-product export prices differ across markets?

László Halpern (), Görg, Holger and Muraközy, Balázs
Authors registered in the RePEc Author Service: Holger Görg and Balazs Murakozy

No 7708, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: In this paper we analyse the relationship between gravity variables and f.o.b. export unit values using Hungarian firm-product-destination data. By taking firm-product level selection into account we show that export unit values increase with distance even for particular firm-product combinations. This cannot be explained by models assuming firm- or even firm-product level selection and constant markups. The differences are important quantitatively; price differences in Hungarian exports between Germany and the US are about 30%. We also show that unit values are positively related to GDP/capita and that there is a weak negative relationship between unit values and market size. We propose two possible explanations: first, firms may export different quality versions of the same product to different markets. Secondly, directly exporting firms may capture part of the markups on transport costs in their f.o.b. prices.

Keywords: Export; Hungary; Price; Selection (search for similar items in EconPapers)
JEL-codes: D40 F12 (search for similar items in EconPapers)
Date: 2010-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (59)

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Related works:
Working Paper: Why Do Within Firm-Product Export Prices Differ across Markets? (2010)
Working Paper: Why do within firm-product export prices differ across markets? (2010)
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