Why Do Within‐Firm-Product Export Prices Differ Across Markets? Evidence from Hungary

14 Pages Posted: 8 Jun 2017

See all articles by Holger Görg

Holger Görg

University of Kiel

Laszlo Halpern

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS); Centre for Economic Policy Research (CEPR); Central European University, Economics Department

Balázs Muraközy

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS)

Date Written: June 2017

Abstract

In this study, we analyse the relationship between distance and f.o.b. export unit values using firm-product-destination data from Hungarian manufacturing. Using 10‐digit Harmonized System data, we show that a doubling of distance is associated with about 7.5 per cent increase in the average product‐level price, from which five percentage points can be attributed to within‐firm-product variation. We run a number of tests to look for heterogeneity in this pattern. Interestingly, the measured effect is very similar for domestic and foreign firms but distance seems to matter somewhat more for EU countries than outside the EU. We do not find much evidence for heterogeneity across product categories based on measures of vertical differentiation. The level of product aggregation matters; the distance coefficient is larger when products are aggregate to the eight or six‐digit level.

Suggested Citation

Görg, Holger and Halpern, László and Muraközy, Balázs, Why Do Within‐Firm-Product Export Prices Differ Across Markets? Evidence from Hungary (June 2017). The World Economy, Vol. 40, Issue 6, pp. 1233-1246, 2017. Available at SSRN: https://ssrn.com/abstract=2982708 or http://dx.doi.org/10.1111/twec.12442

Holger Görg (Contact Author)

University of Kiel ( email )

Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany

László Halpern

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS) ( email )

Toth K str 4
Budapest, 1097
Hungary

HOME PAGE: http://econ.core.hu/~halpern

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Central European University, Economics Department ( email )

Nador utca 9
Budapest, 1051
Hungary

Balázs Muraközy

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS) ( email )

7621 Pécs, Papnovelde u. 22
Budapest, H-1112
Hungary

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