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Markets and Markups: Evidence on the Rising Market Power of Exporters from China

Author

Listed:
  • Corsetti, G.
  • Han, L.
  • Crowley, M.
  • Song, H.

Abstract

The Chinese share of global product markets rose sharply over the last quarter century. Using Chinese customs data from 2000–2014, we show that this expansion coincided with a substantial rise in pricing-to-market. Markup elasticities to exchange rates nearly tripled, with more pronounced increases for highly differentiated products, goods with higher import penetration in destination countries, and products sold by larger firms. To identify these patterns, we develop a new estimator of markup elasticities that controls for marginal costs and endogenous market selection and a new classification of product differentiation based on Chinese linguistics.

Suggested Citation

  • Corsetti, G. & Han, L. & Crowley, M. & Song, H., 2018. "Markets and Markups: Evidence on the Rising Market Power of Exporters from China," Cambridge Working Papers in Economics 1815, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:1815
    Note: gc422, mc865, lh420
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    References listed on IDEAS

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    Cited by:

    1. Corsetti, Giancarlo & Crowley, Meredith & Han, Lu, 2022. "Invoicing and the dynamics of pricing-to-market: Evidence from UK export prices around the Brexit referendum," Journal of International Economics, Elsevier, vol. 135(C).
    2. Anatoli Colicev & Joris Hoste & Jozef Konings, 2019. "Exchange Rate Pass-through after a Large Depreciation," Working Papers 201902, University of Liverpool, Department of Economics.
    3. Crowley, M. A. & Han, L. & Son, M., 2024. "The Swift Decline of the British Pound: Evidence from UK Trade-invoicing after the Brexit Vote," Cambridge Working Papers in Economics 2413, Faculty of Economics, University of Cambridge.
    4. Chung, Wanyu & Perroni, Carlo, 2020. "Rules of Origin and Market Power," The Warwick Economics Research Paper Series (TWERPS) 1300, University of Warwick, Department of Economics.
    5. David C. López-Valenzuela & Enrique Montes-Uribe & Héctor M. Zárate-Solano & Alvaro Carmona-Duarte, 2019. "Determinantes y evolución entre precios y cantidades de las exportaciones industriales de Colombia: un estudio a partir de un modelo de Panel-VAR," Borradores de Economia 1075, Banco de la Republica de Colombia.
    6. Delgado, Mercedes & Mills, Karen G., 2020. "The supply chain economy: A new industry categorization for understanding innovation in services," Research Policy, Elsevier, vol. 49(8).
    7. Obashi, Ayako, 2019. "Trade agreements with cross-border unbundling," Journal of the Japanese and International Economies, Elsevier, vol. 53(C), pages 1-1.
    8. Chung, Wanyu & Perroni, Carlo, 2025. "Regional content requirements and market power: Lessons from CUSFTA," Journal of International Economics, Elsevier, vol. 157(C).
    9. Antonio Acconcia & Elisa Scarinzi, 2022. "The Effects of Local Demand and Supply Restrictions on Markup," CSEF Working Papers 635, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 17 Mar 2022.

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    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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