Prices, Markups, and Trade Reform

Abstract

for useful discussions at early stages of this project and seminar participants at several institutions and conferences. We also thank the Editor, Jean-Marc Robin, and three anonymous referees for insightful comments and suggestions. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Firm investment and exporting: Evidence from China's value-added tax reform

“…It is found that industries with higher external …nancial dependence have a larger estimated coe¢ cient (i.e., 0:2417) than industries with lower external …nancial dependence do (i.e., 0:1133). 17 These results suggest that the VAT pilot reform has a larger e¤ect on industries with higher external …nancial dependence, and support the argument that …rms are bounded by the supply of credit for investment and the VAT pilot reform increased investment by reducing this binding constraint, which in turn led to an increase in the probability of exporting.…”

Pass-through of trade costs to U.S. import prices

“…9 As is evident, price elasticity of demand values are higher under CARA, while markups are higher under CRRA. Compared to the existing literature, the distribution of estimated markups under CARA are consistent with De Loecker and Warzynski (2012), who provide several estimates of markups 9 The estimation results at the sectoral level are given in Table A in for Slovenian manufacturing plants ranging between 1.03 and 1.28. 10 The estimation results regarding the relation between quality and marginal costs (i.e., Equation…”

Product churning, reallocation, and Chinese export growth

“…They find that input allocations across products are very similar to those calculated by allocating inputs according to product revenue shares. Note that we cannot estimate product level shares of inputs as in De Loecker et al (2016) since our data does not include domestic sales by product for each firm. To the extent that inputs are not allocated consistently with revenues, we would expect that products which are allocated input shares which are too high (low) will be estimated to have productivity levels which are too low (high).…”

“…In this sense, we follow Foster, Haltiwanger and Syverson (2008) by considering a set of products with relatively small scope for quality differentiation. We have alternatively tried estimating the input shares, and productivity, using control function methods (De Loecker et al, 2016). A distinct advantage of this approach is that it provides a production function methodology which explicitly disentangles estimated physical productivity from product quality.…”

“…18 De Loecker et al (2016) estimate the input shares across products for multi-product firms. They find that input allocations across products are very similar to those calculated by allocating inputs according to product revenue shares.…”