Markets and Markups: A New Empirical Framework and Evidence on Exporters from China



Corsetti, Giancarlo, Crowley, Meredith, Han, Lu ORCID: 0000-0002-5316-1209 and Song, Huasheng
(2019) Markets and Markups: A New Empirical Framework and Evidence on Exporters from China. [Report]

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Abstract

Firms that dominate global trade export to multiple countries and frequently change their foreign destinations. We develop an estimator of the destination-specific markup elasticity to the exchange rate that controls for endogenous market selection. To proxy for firms' power in local markets, we introduce a new classification of products based on Chinese linguistics that distinguishes between highly and less differentiated goods. Using Chinese customs data, we show that controlling for selectivity unveils significant pricing-to-market for highly differentiated goods. Measured in the importer's currency, the prices of highly differentiated goods are more stable than those of less differentiated products.

Item Type: Report
Additional Information: Available as CEPR Discussion Paper No. DP13904 and CWPE1815
Uncontrolled Keywords: China, differentiated goods, Exchange Rates, markup elasticity, pricing-to-market, product classification, Trade Elasticity
Depositing User: Symplectic Admin
Date Deposited: 09 Apr 2020 10:00
Last Modified: 13 Aug 2021 15:10
DOI: 10.17863/CAM.33787
Related URLs:
URI: https://livrepository.liverpool.ac.uk/id/eprint/3082427