Globalization and the markups of European firms
We use a unique cross
-
section survey of manufacturing firms from four European countries 
(France, Germany, Italy, Spain) linked with bal
ance sheet data to study the relationship 
between key aspects of globalization and firm
-
level markups. The main results are: (i) 
Exporting is positively correlated with markups; (ii) Importing intermediate inputs and 
outsourcing are also positively correla
ted with markups; (iii) Firms with affiliates have higher 
markups than other firms, while simply membership in a group or being foreign
-
owned seem 
to be less important; (iv) Perceived competition from low
-
cost markets is negatively 
correlated with markups;
(v) Higher quality production and innovation, especially if it results 
in IP, has a strong positive relationship with markups; (vi) While these variables are 
correlated, they are significant in a joint model including all four groups, and `fully 
globalize
d' firms tend to charge around 100% higher markups than non
-
globalized firms.