Cross-Sectional Heterogeneity in Price-Cost Margins and the Extent of Rent Sharing at the Sector and Firm Level in France
This paper studies cross-sectional heterogeneity in price-cost margins and the extent of rent sharing among 48 sectors and 10738 (mainly manufacturing) firms in France. At the sectoral level, the average price-cost mark-up and the average extent of rent sharing amount to 1.701 and 0.368 respectively. Ignoring the occurrence of rent sharing reduces the average price-cost mark-up to 1.500. At the firm level, the average parameters are estimated at 1.814 and 0.558 respectively. Using the Swamy (1970) methodology which corrects the observed heterogeneity for sampling heterogeneity, the corresponding estimates of their robust true dispersion are 0.694 and 0.204. Excluding the existence of rent sharing brings the firm-level average price-cost mark-up down to 1.491. The corresponding robust true dispersion amounts to 0.493.
|Date of creation:||Dec 2005|
|Contact details of provider:|| Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany|
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
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.:
- Swamy, P A V B, 1970.
"Efficient Inference in a Random Coefficient Regression Model,"
Econometric Society, vol. 38(2), pages 311-323, March.
- Tom Doan, "undated". "SWAMY: RATS procedure to compute a GLS matrix weighted estimator for a panel data set," Statistical Software Components RTS00206, Boston College Department of Economics.
- Dobbelaere, Sabien, 2004. "Estimation of price-cost margins and union bargaining power for Belgian manufacturing," International Journal of Industrial Organization, Elsevier, vol. 22(10), pages 1381-1398, December.
- Jacques Mairesse & Zvi Griliches, 1988. "Heterogeneity in Panel Data: Are There Stable Production Functions?," NBER Working Papers 2619, National Bureau of Economic Research, Inc.
- Hall, Robert E, 1988. "The Relation between Price and Marginal Cost in U.S. Industry," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 921-947, October.
- Robert E. Hall, 1986. "The Relation Between Price and Marginal Cost in U.S. Industry," NBER Working Papers 1785, National Bureau of Economic Research, Inc.
- Bughin, Jacques, 1996. "Trade Unions and Firms' Product Market Power," Journal of Industrial Economics, Wiley Blackwell, vol. 44(3), pages 289-307, September.
- Damien J. Neven & Lars-Hendrik Röller & Zhentang Zhang, 2002. "Endogenous Costs and Price-Cost Margins," Discussion Papers of DIW Berlin 294, DIW Berlin, German Institute for Economic Research.
- Bruno Crépon & Rozen Desplatz & Jacques Mairesse, 2010. "Price-Cost Margins and Rent Sharing: Evidence from a Panel of French Manufacturing Firms," NBER Chapters,in: Contributions in Memory of Zvi Griliches, pages 583-610 National Bureau of Economic Research, Inc.
- Bruno Crépon & Rozen Desplatz & Jacques Mairesse, 2005. "Price-Cost Margins and Rent Sharing: Evidence from a Panel of French Manufacturing Firms," Annals of Economics and Statistics, GENES, issue 79-80, pages 583-610.