Markups and exporting behavior of foreign affiliates

Hongyong Zhang, Lianming Zhu

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

This study investigates the effect of exporting on markups for firms in China with a focus on foreign affiliates. Firm markups are first recovered after correcting for both output and input price biases. The analysis reveals that exporters which are affiliates of foreign firms charge, on average, lower markups in their export pricing. The markups are decomposed into price and marginal cost components to show that although exporting increases both price and marginal cost, the price increases are small relative to the increases in marginal cost. Heterogeneous effects of exporting on markups across firms and location are also examined.

Original languageEnglish
JournalJournal of Comparative Economics
DOIs
Publication statusAccepted/In press - 2015 Oct 30

Keywords

  • Export
  • Firm productivity
  • Foreign firms
  • Markups

ASJC Scopus subject areas

  • Economics and Econometrics

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