Markups, import competition and exporting

Abstract

This paper analyses the relationship between markups and international trade at the firm level using a large sample of French manufacturing firms for the period 1995-2007. In particular, the paper investigates the effect of increasing import competition from China on firms' price-cost margins and the way in which exporting interacts with this effect. The results show robust evidence that firms in more direct competition with Chinese imports decrease their markups. However, firms that become exporters experience a smaller reduction in their price-cost margins. Consistent with these findings, the results also show that firms facing tougher competition from China are more likely to start exporting to avoid such competitive pressures.

Policy Uncertainty, Trade, and Welfare: Theory and Evidence for China and the United States

“…Moreover, all other variables are significant and have the predicted sign (Table 4). 20 Directly testing the effect of TPU on upgrading requires data on export technology expenditures, which are not available. Nevertheless, we can provide indirect evidence.…”

“…We focus the quantification and robustness on the more conservative HS-6 estimates. 20 The magnitude of the uncertainty coefficient in column 5 of Table 4 is attenuated toward zero because entry is measured with error when we use product data. The attenuation reflects measurement error whenever a true variety is defined at a level finer than the HS-10, thus we do not use these estimates for quantification.…”

“…• the sequence of relative prices after a switch to low or high protection, respectively P ˆ 0, T ( g h , P ˆ 1 , Θ, I ) , in (20) and P ˆ 2, T ( g, P ˆ 1 , Θ, I ) , (45) in online Appendix D.1.2; • the average profit change due to prices after a switch to high or low protection, respectively g ( P ˆ 2, T / P ˆ 1 , Θ ) in (20) and g h ( P ˆ 0, T / P ˆ 1 , Θ ) in (23),…”

Robots and risk of COVID-19 workplace contagion: Evidence from Italy

“…The ordered logit estimator can also include an IV strategy to take into account our endogenous variable. However, as the ordered logit model is nonlinear, it is preferable to include, in the second stage, the error term from the first stage alongside the original endogenous variable rather than the predicted values of the endogenous variable ( Caselli, Schiavo, 2020 , Papke, Wooldridge, 2008 ). Given the two-step structure of the procedure, the standard errors in the second stage are computed by bootstrapping (i.e., resampling the cross-sectional units based on 500 repetitions).…”

Trade policy and firm performance: introduction to the special section

“…In a world where production no longer occurs in a single location, but rather is split into separate steps taking place in distance countries, intermediate products travel back and forth along complex value chains, crossing borders multiple times. As such, not only do imports represent as much a source of domestic competitiveness (Bloom et al 2016;Caselli 2018) as they may represent a threat (Iacovone et al 2013;Utar 2014;Caselli and Schiavo 2020;Caselli et al 2021), but local firms may end up being negatively affected by the very trade barriers that are supposed to protect them from foreign competition (Bown, 2020). The news that in September 2020 thousands of US companies were suing the Trump administration over its China tariffs makes this point very clear.…”