Sales and Markup Dispersion: Theory and Empirics.
We characterize the relationship between the distributions of two variables linked by a structural model. We then show that, in models of heterogeneous firms in monopolistic competition, this relationship implies a new demand function that we call "CREMR" (Constant Revenue Elasticity of Marginal Rev...
| Publicado en: | Econometrica Vol. 89; no. 4; pp. 1753 - 1789 |
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| Autores principales: | , , |
| Formato: | Artículo |
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Wiley-Blackwell
Jul2021
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=151583006&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 151583006 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00129682 ECN jtl: Econometrica issn: 00129682 maglogo: Y pubinfo: dt: Jul2021 vid: 89 iid: 4 pid: 480 pub: Wiley-Blackwell artinfo: ui: 151583006 10.3982/ECTA17416 ppf: 1753 ppct: 36 formats: tig: atl: Sales and Markup Dispersion: Theory and Empirics. aug: au: Mrázová, Monika Neary, J. Peter Parenti, Mathieu affil: Geneva School of Economics and Management, University of Geneva CEPR CESifo Department of Economics, University of Oxford ECARES, Université Libre de Bruxelles su: Monopolistic competition Demand function Market equilibrium Structural models Dispersion (Chemistry) Pareto distribution Pricing sug: subj: Monopolistic competition Demand function Market equilibrium Structural models Dispersion (Chemistry) Pareto distribution Pricing keyword: CREMR demands Gibrat's Law heterogeneous firms lognormal versus Pareto distributions sales and markup distributions CREMR demands Gibrat's Law heterogeneous firms lognormal versus Pareto distributions sales and markup distributions ab: We characterize the relationship between the distributions of two variables linked by a structural model. We then show that, in models of heterogeneous firms in monopolistic competition, this relationship implies a new demand function that we call "CREMR" (Constant Revenue Elasticity of Marginal Revenue). This demand function is the only one that is consistent with productivity and sales distributions having the same form (whether Pareto, lognormal, or Fréchet) in the cross section, and it is necessary and sufficient for Gibrat's Law to hold over time. Among the applications we consider, we use our methodology to characterize misallocation across firms; we derive the distribution of markups implied by any assumptions on demand and productivity; and we show empirically that CREMR‐based markup distributions provide an excellent parsimonious fit to Indian firm‐level data, which in turn allows us to calculate the proportion of firms that are of suboptimal size in the market equilibrium. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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