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Markup Heterogeneity, Export Status and the Establishment of the Euro

Author

Listed:
  • Sarah Guillou

    (OFCE Sciences Po. Paris)

  • Lionel Nesta

    (Université Côte d'Azur
    GREDEG CNRS
    OFCE Sciences Po. Paris
    SKEMA Business School)

Abstract

We investigate the effects of the establishment of the euro on the markups of French manufacturing firms. Merging firm-level census data with customs data, we estimate time-varying firm-specific markups and distinguish between eurozone exporters from other firms between 1995 and 2007. We find that the establishment of the euro has had a pronounced pro-competitive impact by reducing firm markups by 14 percentage points. By reducing export costs, the euro represented an opportunity for eurozone exporters to increase their margins relative to other firms. Quantile regressions show that the euro has led to a reduction in the variance of markups.

Suggested Citation

  • Sarah Guillou & Lionel Nesta, 2017. "Markup Heterogeneity, Export Status and the Establishment of the Euro," GREDEG Working Papers 2017-35, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    • Handle: RePEc:gre:wpaper:2017-35
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    References listed on IDEAS

    as
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    4. Flora Bellone & Patrick Musso & Lionel Nesta & Frederic Warzynski, 2016. "International trade and firm-level markups when location and quality matter," Journal of Economic Geography, Oxford University Press, vol. 16(1), pages 67-91.
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    Cited by:

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    2. Chih‐Hai Yang, 2021. "Do exporters have markup premiums and why (not)? Evidence from China," The World Economy, Wiley Blackwell, vol. 44(4), pages 956-979, April.

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    More about this item

    Keywords

    Markups; Heterogeneity; Euro; Competition; Export Destination;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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