Pricing to firm: an analysis of firm- and product-level import prices. Review of International Economics. 2007;15(3):574-91. Abstract
Pricing to firm: an analysis of firm- and product-level import prices
We use Hungarian Customs data on product-level imports of manufacturing firms to document that the import price of a particular product varies substantially across buying firms. We relate the level of import prices to firm characteristics such as size, foreign ownership, and market power. We develop a theory of “pricing to firm” (PTF), where markups depend on the technology and competitive environment of the buyer. The predictions of the model are confirmed by the data: import prices are higher for firms with greater market power, and for more essential intermediate inputs (with a high share in material costs). We take account of the endogeneity of the buyer’s market power with respect to higher import prices and unobserved cost heterogeneity within product categories. The magnitude of PTF is big: the standard deviation of price predicted by PTF is 21.5%.
Imports and Productivity.; 2005. Abstract
Imports and Productivity
What is the effect of imports on productivity? To answer this question, we estimate a structural model of producers using product-level import data for a panel of Hungarian manufacturing firms from 1992 to 2001. In our model with heterogenous firms, producers choose to import or purchase domestically varieties of intermediate inputs. Imports affect firm productivity through expanding variety as well as improved input quality. The model leads to a production function where the total factor productivity of a firm depends on the share of inputs imported. To estimate this import-augmented production function, we extend the Olley and Pakes (1996) procedure for a setting with an additional state variable, the number of input varieties imported. Our results suggest that the role of imports is both statistically and economically significant. Imports are responsible for 30% of the growth in aggregate total factor productivity in Hungary during the 1990s. About 50% of this effect is through imports advancing firm level productivity, while the remaining 50% comes from the reallocation of capital and labour to importers.
A minimálbér költségvetési hatásai. In: Pritz P, Johancsik J, Baranyain頓zab, editors. A tudomány a gyakorlat szolgálatában: A foglalkoztatási szint bovítésének korlátai és lehetoségei. Budapest, Hungary: Magyar Tudományos Akadémia; 2004. p. 174-95.
A minimálbér költségvetési hatásai. Közgazdasági Szemle. 2004;51(4):325-45.
A minimálbér költségvetési hatásai. MTA; 2004.
Pricing to firm: an analysis of firm- and product-level import prices
We use Hungarian Customs data on product-level imports and exports of manufacturing firms to document that the import price of a particular product varies substantially across buying firms. Importantly, we can relate the level of import prices to firm characteristics such as size, foreign ownership and market power. We develop a theory of ‘pricing to firm’ (PTF), where markups depend on the technology and competitive environment of the buyer. The predictions of the model are confirmed by the data: import prices are higher for firms with greater market power, and for intermediate inputs with a high share in material costs. We take account of the endogeneity of the buyer's market power with respect to higher import prices. We show that even if unobserved cost heterogeneity within product categories is substantial, it is uncorrelated with our variables of interest. The magnitude of PTF is big: the standard deviation of price predicted by PTF is 21.5%.
Export pricing of foreign firms in Hungary : estimations for 1992-1996. London: Centre for Economic Policy Research; 2003. Abstract
Export pricing of foreign firms in Hungary : estimations for 1992-1996
We use Hungarian Customs data on product-level imports and exports of manufacturing firms to document that the import price of a particular product varies substantially across buying firms. Importantly, we can relate the level of import prices to firm characteristics such as size, foreign ownership and market power. We develop a theory of ‘pricing to firm’ (PTF), where markups depend on the technology and competitive environment of the buyer. The predictions of the model are confirmed by the data: import prices are higher for firms with greater market power, and for intermediate inputs with a high share in material costs. We take account of the endogeneity of the buyer's market power with respect to higher import prices. We show that even if unobserved cost heterogeneity within product categories is substantial, it is uncorrelated with our variables of interest. The magnitude of PTF is big: the standard deviation of price predicted by PTF is 21.5%.