Standard models of international trade suggest that exporting firms tend to have different characteristics from those that sell only to the domestic market. These firms show, in general, higher productivity, higher markups and higher average wages compared to the firms that sell only to the domestic market.

Using firm-level data for the period 2010-2019, it is shown that Portuguese exporting firms have higher markup compared to firms that sell exclusively to the domestic market. The estimated average markup gain varies between 1.2% and 1.3% in the manufacturing sector and between 2.6% and 2.7% in the non-manufacturing sector, depending on the specification. 

In the Manufacturing sector, the markup premium of exporters is particularly noticeable in industries classified in "Furniture" which reaches a markup premium of exporting firms of around 5 percent and, also "Chemicals" and "Rubber, Plastics, and Other Non-Met. Minerals", in which it presents values of around 3 percent. In the Non-Manufacturing sector, the industries with the highest export markup premium are "Information and communication", "Professional, scientific, and technical activities" and "Construction", with values close to 8, 7 and 4 percent, respectively.

For more details see Soares and Sousa (2023): “Markup premium of Portuguese exporters”, published in Banco de Portugal Economic Studies (Vol. 9, N. 1).

Prepared by Ana Cristina Soares and Rita Sousa. The analyses, opinions and findings of this paper represent the views of the authors, they are not necessarily those of the Banco de Portugal or the Eurosystem.

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