Export Prices across Firms and Destinations

54 Pages Posted: 20 Jan 2009 Last revised: 12 Oct 2011

See all articles by Kalina Manova

Kalina Manova

University College London - Department of Economics

Zhiwei Zhang

Nomura Holdings, Inc. (NHI) - Nomura Securities Co., Ltd.; International Monetary Fund (on leave)

Multiple version iconThere are 2 versions of this paper

Date Written: June 1, 2011

Abstract

This paper establishes six stylized facts about firms' export prices using detailed customs data on the universe of Chinese trade flows. First, across firms selling a given product, exporters that charge higher prices earn greater revenues in each destination, have bigger worldwide sales, and enter more markets. Second, firms that export more, that enter more markets and that charge higher export prices import more expensive inputs. Third, across destinations within a firm-product, firms set higher prices in richer, larger, bilaterally more distant and overall less remote countries. Fourth, across destinations within a firm-product, firms earn bigger revenues in markets where they set higher prices. Fifth, across firms within a product, exporters with more destinations offer a wider range of export prices. Finally, firms that export more, that enter more markets and that offer a wider range of export prices pay a wider range of input prices and source inputs from more origin countries. We propose that trade models should incorporate two features to rationalize these patterns in the data: more successful exporters use higher-quality inputs to produce higher-quality goods (stylized facts 1 and 2), and firms vary the quality of their products across destinations by using inputs of different quality levels (stylized facts 3, 4, 5 and 6).

Keywords: export prices, firm heterogeneity, productivity, quality

JEL Classification: F10, F12, F14, L10

Suggested Citation

Manova, Kalina B. and Zhang, Zhiwei, Export Prices across Firms and Destinations (June 1, 2011). Quarterly Journal of Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1326712

Kalina B. Manova (Contact Author)

University College London - Department of Economics ( email )

Drayton House, 30 Gordon Street
30 Gordon Street
London, WC1H 0AX
United Kingdom

Zhiwei Zhang

Nomura Holdings, Inc. (NHI) - Nomura Securities Co., Ltd. ( email )

Hong Kong
Japan

International Monetary Fund (on leave) ( email )

700 19th Street N.W.
Washington, DC 20431
United States

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