Effect of Foreign Affiliates on Exporting and Markups

Hongyong Zhang and Lianming Zhu

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: In this paper, we empirically investigate the effect of foreign affiliates on the relationship between exports and markups of Chinese firms. After recovering quantity-based firm markups by correcting for both output and input price biases, we find evidence that exporters charge higher markups than non-exporters, and this effect is substantially less pronounced for foreign affiliates. We further decompose markups into a price and cost effect and find that the cost effect accounts for the lower markups of foreign-owned exporters. Our results suggest that foreign-owned exporters have a price premium but higher marginal costs on average.

Pages: 21 pages
Date: 2015-11
New Economics Papers: this item is included in nep-int and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rieti.go.jp/jp/publications/dp/15e127.pdf (application/pdf)

Related works:
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:eti:dpaper:15127

Access Statistics for this paper

More papers in Discussion papers from Research Institute of Economy, Trade and Industry (RIETI) Contact information at EDIRC.
Bibliographic data for series maintained by TANIMOTO, Toko ().