International Trade and Firm-level Markups when Location and Quality Matter
Flora Bellone (),
Patrick Musso (),
Lionel Nesta () and
No 2014-37, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France
In this paper, we estimate firm-level markups and test some micro-level predictions of a model of international trade with heterogenous firms and endogenous mark-ups. Our theoretical framework is an extended version of the Melitz and Ottaviano (2008) (MO) model which features both quality and spatial differentiation across firms. In line with our model, we find that firm markups are positively related to firm productivity and negatively related to the toughness of local competition. Considering the relationship between firm markups and exports, we find evidence that the quality enhancing channel overbalances the price depressing channel of global competition.
Keywords: Markups; Productivity; Exports; Firm-level data; France (search for similar items in EconPapers)
JEL-codes: F12 L1 (search for similar items in EconPapers)
Pages: 40 pages
New Economics Papers: this item is included in nep-bec and nep-int
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Forthcoming in Journal of Economic Geography
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http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2014-37.pdf First version, 2014 (application/pdf)
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Journal Article: International trade and firm-level markups when location and quality matter (2016)
Working Paper: International Trade and Firm-Level Markups when Location and Quality Matter (2016)
Working Paper: International Trade and Firm-Level Markups when Location and Quality Matter (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:gre:wpaper:2014-37
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