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Export activity, persistence and mark-ups

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  • Lourdes Moreno Martin
  • Diego Rodriguez Rodriguez

Abstract

This article addresses the differences in margins across exporting and nonexporting firms. We jointly estimate a translog cost function, a variable factor share equation and price-cost margin equations to analyse the effect of persistence in export activity on margins. Results indicate that nonexporters have smaller margins than persistent exporters and firms that entered foreign markets during the nineties. However, larger export ratio is negatively associated with margins for persistent exporters. It suggests that efficiency advantages for exporters are partially compensated by higher competitive pressure in international markets. These results are in accordance with the predictions of Melitz and Ottaviano (2005).

Suggested Citation

  • Lourdes Moreno Martin & Diego Rodriguez Rodriguez, 2010. "Export activity, persistence and mark-ups," Applied Economics, Taylor & Francis Journals, vol. 42(4), pages 475-488.
    • Handle: RePEc:taf:applec:v:42:y:2010:i:4:p:475-488
    DOI: 10.1080/00036840701604529
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    Cited by:

    1. Lourdes Moreno & Diego Rodríguez, 2011. "Markups, Bargaining Power and Offshoring: An Empirical Assessment-super-1," The World Economy, Wiley Blackwell, vol. 34(9), pages 1593-1627, September.
    2. Corchón, Luis C. & Moreno, L., 2010. "Interpreting markups in Spanish manufacturing: The exponential model," MPRA Paper 26609, University Library of Munich, Germany.
    3. Barajas, A. & Huergo, E. & Moreno, L., 2012. "The Impact of International Research Joint Ventures on SMEs Performance," MPRA Paper 36306, University Library of Munich, Germany.
    4. Lago-Peñas, Santiago & Sanchez-Fernandez, Patricio, 2016. "La internacionalización de la empresa gallega. Resultados 2015 de la Encuesta Ardán de empresa internacionalizada
      [The internationalization of the Galician companies. Results of the 2015 Ardan Surv      ," MPRA Paper 72889, University Library of Munich, Germany, revised Jul 2016.
    5. Tamminen, Saara & Chang, Han-Hsin, 2012. "Company heterogeneity and mark-up variability," Working Papers 32, VATT Institute for Economic Research.
    6. Diego Rodriguez & Lourdes Moreno, 2013. "The effect of international trade on markups distribution," Economics and Business Letters, Oviedo University Press, vol. 2(1), pages 33-41.

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