Markup and productivity of exporters and importers

Balazs Murakozy and Cecília Hornok

No 1530, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

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.

Keywords: markups; exporting; importing; detailed trade data; Hungary (search for similar items in EconPapers)
JEL-codes: D22 D24 F14 L11 L60 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2015-06
New Economics Papers: this item is included in nep-bec, nep-eff and nep-int
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Citations: View citations in EconPapers (7)

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