Munich Personal RePEc Archive

Markups and Firm-Level Export Status: Comment

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

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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.

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