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Markups and Export Pricing

Gullstrand, Joakim LU ; Olofsdotter, Karin LU and Thede, Susanna LU (2011)
Abstract
We analyze empirically product-price variation across export destinations using detailed firm-product data. Most recent studies using highly disaggregated data emphasize variations in product quality as an explanation as to why firms charge different prices for the same product on different export markets. In this paper, we take an alternative approach and assume that variations in firms' export prices reflect market segmentation and investigate the relationship between price variation and average firm markup. We study an entire supply chain in order to see how price discrimination varies across sectors with different distribution networks. Specifically, we make use of firm-level data for exporting firms in the Swedish food supply chain.... (More)
We analyze empirically product-price variation across export destinations using detailed firm-product data. Most recent studies using highly disaggregated data emphasize variations in product quality as an explanation as to why firms charge different prices for the same product on different export markets. In this paper, we take an alternative approach and assume that variations in firms' export prices reflect market segmentation and investigate the relationship between price variation and average firm markup. We study an entire supply chain in order to see how price discrimination varies across sectors with different distribution networks. Specifically, we make use of firm-level data for exporting firms in the Swedish food supply chain. The results offer new information about the behavior of exporting firms. Hence, for the food-processing industry, firms with greater ability to discriminate between markets are associated with a higher markup. However, the results also reveal that markups are a complex function of firm characteristics and that the price-setting behavior of firms in the manufacturing sector is not necessarily observed in other sectors of the supply chain. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Working Paper
publication status
published
subject
pages
27 pages
publisher
Working Papers, Department of Economics, Lund University
language
English
LU publication?
yes
id
b25e16d2-22ff-4e9b-91bd-a6e113796434 (old id 2269301)
alternative location
http://swopec.hhs.se/lunewp/abs/lunewp2011_037.htm
date added to LUP
2012-01-09 09:10:02
date last changed
2016-04-16 07:26:39
@misc{b25e16d2-22ff-4e9b-91bd-a6e113796434,
  abstract     = {We analyze empirically product-price variation across export destinations using detailed firm-product data. Most recent studies using highly disaggregated data emphasize variations in product quality as an explanation as to why firms charge different prices for the same product on different export markets. In this paper, we take an alternative approach and assume that variations in firms' export prices reflect market segmentation and investigate the relationship between price variation and average firm markup. We study an entire supply chain in order to see how price discrimination varies across sectors with different distribution networks. Specifically, we make use of firm-level data for exporting firms in the Swedish food supply chain. The results offer new information about the behavior of exporting firms. Hence, for the food-processing industry, firms with greater ability to discriminate between markets are associated with a higher markup. However, the results also reveal that markups are a complex function of firm characteristics and that the price-setting behavior of firms in the manufacturing sector is not necessarily observed in other sectors of the supply chain.},
  author       = {Gullstrand, Joakim and Olofsdotter, Karin and Thede, Susanna},
  language     = {eng},
  note         = {Working Paper},
  pages        = {27},
  publisher    = {Working Papers, Department of Economics, Lund University},
  title        = {Markups and Export Pricing},
  year         = {2011},
}