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Markup and productivity of exporters and importers

Author

Listed:
  • Balázs Murakozy

    () (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)

  • Cecilia Hornok

    () (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)

Abstract

This paper studies the relationship between firm markups and importing intermediate inputs and exporting using detailed firm-level data from Hungary in 1995-2003. We estimate production functions structurally to obtain firm-year-level productivity and markup estimates. We find that importing intermediate inputs is associated with large markup premium, while the exporter markup premium is nonexistent when we control for the importer status. We interpret our results in a simple theoretical framework, where firms lower their markup when exporting to more competitive foreign markets and where importing intermediate inputs leads to higher-quality products.

Suggested Citation

  • Balázs Murakozy & Cecilia Hornok, 2015. "Markup and productivity of exporters and importers," IEHAS Discussion Papers 1530, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  • Handle: RePEc:has:discpr:1530
    as

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    File URL: http://econ.core.hu/file/download/mtdp/MTDP1530.pdf
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    References listed on IDEAS

    as
    1. Klette, Tor Jakob, 1999. "Market Power, Scale Economies and Productivity: Estimates from a Panel of Establishment Data," Journal of Industrial Economics, Wiley Blackwell, vol. 47(4), pages 451-476, December.
    2. Andrew Atkeson & Ariel Burstein, 2008. "Pricing-to-Market, Trade Costs, and International Relative Prices," American Economic Review, American Economic Association, vol. 98(5), pages 1998-2031, December.
    3. 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 537-544, May.
    4. repec:wsi:wschap:9789813109698_0004 is not listed on IDEAS
    5. Alexander Vogel & Joachim Wagner, 2016. "Higher Productivity in Importing German Manufacturing Firms: Self-selection, Learning from Importing or Both?," World Scientific Book Chapters,in: Microeconometrics of International Trade, chapter 4, pages 139-174 World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Muraközy, Balázs & Hornok, Cecília, 2015. "Magyar vállalatok haszonkulcsai
      [Mark-ups of Hungarian firms]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(10), pages 1048-1069.
    2. Békés, Gábor & Hornok, Cecília & Muraközy, Balázs, 2016. "Globalization and the markups of European firms," Kiel Working Papers 2044, Kiel Institute for the World Economy (IfW).

    More about this item

    Keywords

    markups; exporting; importing; detailed trade data; Hungary;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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