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Trading activities, productivity and markups: evidence for spanish manufacturing

Juan A. Máñez Castillejo, M. Consuelo Mínguez Bosque, María E. Rochina-Barrachina and Juan A. Sanchis Llopis ()
Additional contact information
Juan A. Máñez Castillejo: Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).
M. Consuelo Mínguez Bosque: IVIE, Carrer de la Guàrdia Civil 22, 46020 València (Spain).
María E. Rochina-Barrachina: Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).

No 1905, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: This work analyses the firms’ internationalization strategies of importing intermediates and exporting output, and the potential rewards of these activities in terms of total factor productivity (TFP), as a proxy for marginal costs, and markups. It further deepens into the study of the relationship between internationalization strategies and markups by disentangling whether it operates through affecting firms’ marginal costs and/or firms’ prices. The panel database employed in this paper is the Spanish Survey on Business Strategies (ESEE) for the period 2006- 2014. Results in the paper distinguish between SMEs and large firms and indicate that there is high persistence in the performance of these activities and in firms’ TFP and markups. In addition, the internationalization strategies are especially relevant for SMEs, as for this group we obtain rewards of the two activities in terms of both TFP and markups. Furthermore, we also find that these strategies allow SMEs to charge higher output prices.

Keywords: Exports; imports of intermediates; total factor productivity; markups; output prices; manufacturing; firm-level data (search for similar items in EconPapers)
JEL-codes: D24 F14 F61 L11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eff, nep-eur, nep-int and nep-sbm
Date: 2019-05
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