Type
Article
Titre
Markups and markdowns
Dans
Economics Letters
Éditeur
Elsevier B.V.
Volume
173
Pages
104 - 107 p.
ISSN
01651765
Mots clés
Markups, Irreversibility, Uncertainty, Negative price-cost margins, French manufacturing data
Résumé
EN
This paper studies the high yet undocumented incidence of firms displaying markups lower than unity, i.e., prices lower than marginal costs, for protracted periods of time. Using a large sample of French manufacturing firms for the period 1990–2007, the paper estimates markups at the firm level and documents in a robust way the extent to which firms exhibit negative price-cost margins. The paper also investigates the relationship between the incidence and persistence of negative price-cost margins and candidate explanations, such as subsidies, strategic behaviour, uncertainty and irreversibility.

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