Markups and Firm-Level Export Status: Comment

Deng, Zhongqi and Chen, Yongjun (2016): Markups and Firm-Level Export Status: Comment.

Abstract

This paper reviews a recent paper by De Loecker and Warzynski (AER, 2012), which developed a method (so-called DLW method) to estimate markups (market powers) using plant-level production data. Although DLW aimed to explore the relationship between markups and export behavior, its core value is the estimation method of firm-level markups. However, this paper finds that the DLW method still has some errors, one is the disadvantages of supply-side model, the other is that they used an identical equation to estimate markup.

• Item Type: MPRA Paper
• Language: English
• Keywords: Market power; DLW method; Supply-side model; Parameters identification
• Subjects: F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L12 - Monopoly ; Monopolization Strategies; L - Industrial Organization > L4 - Antitrust Issues and Policies > L41 - Monopolization ; Horizontal Anticompetitive Practices

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