Export Prices of U.S. Firms
26 Pages Posted: 22 Dec 2011
Date Written: December 1, 2011
Using confidential firm-level data from the United States in 2002, we show that exporting firms charge prices for narrowly defined goods that differ substantially with the characteristics of firms and export markets. We control for selection into export markets using a three-stage estimator. We have three main results. First, we find that that highly productive and skill intensive firms charge higher prices, while capital-intensive firms charge lower prices. Second, the very large correlation between distance and export prices found by Baldwin and Harrigan (2011) is largely due to a composition effect. Third, U.S. firms charge slightly higher prices to larger and richer markets, and substantially higher prices to markets other than Canada and Mexico.
Keywords: exporters, firm level data, pricing, heterogeneous firms
JEL Classification: F1, F10, F23
Suggested Citation: Suggested Citation