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Mark-up and Cost Dispersion across Firms: Direct Evidence from Producer Surveys in Pakistan

David Atkin (), Azam Chaudhry, Shamyla Chaudry, Amit Khandelwal and Eric Verhoogen ()

No 20868, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Researchers typically invoke theoretical assumptions to estimate mark-ups. Instead, we directly obtain mark-ups by surveying Pakistani soccer-ball producers. We document six facts: (1) Mark-ups are more dispersed than costs; (2) Mark-ups and costs increase with firm size; (3) The mark-up elasticity with respect to size exceeds the cost elasticity; (4) Costs increase with size because larger firms use higher-quality inputs; (5) Larger firms charge higher mark-ups because they have higher production shares of high-quality balls that carry higher mark-ups, and because they charge higher mark-ups conditional on ball type; (6) Correlations suggest marketing efforts are important for generating higher mark-ups.

JEL-codes: F1 L1 O25 (search for similar items in EconPapers)
Date: 2015-01
Note: DEV ITI PR
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Published as David Atkin & Azam Chaudhry & Shamyla Chaudhry & Amit K. Khandelwal & Eric Verhoogen, 2015. "Markup and Cost Dispersion across Firms: Direct Evidence from Producer Surveys in Pakistan," American Economic Review, American Economic Association, vol. 105(5), pages 537-44, May.

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Journal Article: Markup and Cost Dispersion across Firms: Direct Evidence from Producer Surveys in Pakistan (2015) Downloads
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