Why do within firm-product export prices differ across markets?
AbstractIn 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7708.
Date of creation: Feb 2010
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- Holger Gorg & Laszlo Halpern & Balazs Murakozy, 2010. "Why Do Within Firm-Product Export Prices Differ across Markets?," IEHAS Discussion Papers 1003, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
- Holger Görg & László Halpern & Balász Muraközy, 2010. "Why do within firm-product export prices differ across markets?," Kiel Working Papers 1596, Kiel Institute for the World Economy.
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Matthieu Crozet & Keith Head & Thierry Mayer, 2009.
"Quality Sorting and Trade: Firm-Level Evidence for French Wine,"
2009-14, CEPII research center.
- Matthieu Crozet & Keith Head & Thierry Mayer, 2012. "Quality Sorting and Trade: Firm-level Evidence for French Wine," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 609-644.
- Crozet, Matthieu & Head, Keith & Mayer, Thierry, 2009. "Quality Sorting And Trade: Firm-Level Evidence For French Wine," Working Papers 53883, American Association of Wine Economists.
- Matthieu Crozet & Keith Head & Thierry Mayer, 2009. "Quality sorting and trade: Firm-level evidence for French wine," Sciences Po publications 7295, Sciences Po.
- Crozet, Matthieu & Head, Keith & Mayer, Thierry, 2009. "Quality sorting and trade: Firm-level evidence for French wine," CEPR Discussion Papers 7295, C.E.P.R. Discussion Papers.
- David Hummels & Alexandre Skiba, 2004.
"Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture,"
Journal of Political Economy,
University of Chicago Press, vol. 112(6), pages 1384-1402, December.
- David Hummels & Alexandre Skiba, 2002. "Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture," NBER Working Papers 9023, National Bureau of Economic Research, Inc.
- Johnson, Robert C., 2012. "Trade and prices with heterogeneous firms," Journal of International Economics, Elsevier, vol. 86(1), pages 43-56.
- Richard Kneller & Zhihong Yu, . "Quality Selection, Chinese Exports and Theories of Heterogeneous Firm Trade," Discussion Papers 08/44, University of Nottingham, GEP.
- Gabor Bekes & Peter Harasztosi & Balazs Murakozy, 2009.
"Firms and Products in International Trade: Data and Patterns for Hungary,"
IEHAS Discussion Papers
0919, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
- Gábor Békés & Péter Harasztosi & Balázs Muraközy, 2009. "Firms and Products in International Trade: Data and Patterns for Hungary," CeFiG Working Papers 9, Center for Firms in the Global Economy, revised 12 Oct 2009.
- Hallak, Juan Carlos & Sivadasan, Jagadeesh, 2008. "Productivity, quality and exporting behavior under minimum quality constraints," MPRA Paper 24146, University Library of Munich, Germany.
- Martin, Julien, 2012.
"Markups, quality, and transport costs,"
European Economic Review,
Elsevier, vol. 56(4), pages 777-791.
- Francesco Di Comite & Jacques-François Thisse & Hylke Vandenbussche, 2011.
"Verti-zontal differentiation in monopolistic competition,"
Working Paper Research
216, National Bank of Belgium.
- Francesco DI COMITE & Jacques-François THISSE & Hylke VANDENBUSSCHE, 2011. "Verti-zontal Differentiation in Monopolistic Competition," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011046, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Francesco Di Comite & Jean-François Thisse & Hylke Vandenbussche, 2011. "Vert-zonal Differentiation in Monopolistic Competition," LICOS Discussion Papers 30011, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
- Francesco Di Comite & Jacques-François Thisse & Hylke Vandenbussche, 2011. "Verti-zontal Differentiation in Monopolistic Competition," Development Working Papers 322, Centro Studi Luca d\'Agliano, University of Milano, revised 17 Oct 2011.
- Di Comite, Francesco & Thisse, Jacques-François & Vandenbussche, Hylke, 2012. "Verti-zontal Differentiation in Monopolistic Competition," CEPR Discussion Papers 8752, C.E.P.R. Discussion Papers.
- F. Banu Demir, 2011. "Trading Tasks and Quality," Economics Series Working Papers 582, University of Oxford, Department of Economics.
- Daria Pus & László Mátyás & Cecilia Hornok, 2013. "Modelling Firm-Product Level Trade: A Multi-Dimensional Random Effects Panel Data Approach," CEU Working Papers 2013_2, Department of Economics, Central European University, revised 08 May 2013.
- Gullstrand, Joakim & Olofsdotter, Karin & Thede, Susanna, 2011. "Markups and export pricing," Working Papers 2011:37, Lund University, Department of Economics.
- James Harrigan & Xiangjun Ma & Victor Shlychkov, 2011.
"Export Prices of U.S. Firms,"
11-42, Center for Economic Studies, U.S. Census Bureau.
- Békés, Gábor & Muraközy, Balázs & Harasztosi, Péter, 2011. "Firms and products in international trade: Evidence from Hungary," Economic Systems, Elsevier, vol. 35(1), pages 4-24, March.
- Rollo, Valentina, 2012. "Determinants of Tanzanian export prices," Policy Research Working Paper Series 6225, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.