Export Prices and Markups with a Common Currency: Empirical Evidence from Greek Exporting Firms and Euro Adoption (with K. Drivas and M. Katsimi)
(Click here for an older version entitled "The Single Currency Effect on Exports: Firm Heterogeneity, Markups and the Euro" jointly written by S. Kalyvitis, M. Katsimi, E. Pappa and B.J. Restrepo)
Abstract: We estimate the effect of euro adoption on prices using data on Greek exporters spanning over the period 1999-2007. The overall impact of the euro on the prices of exports was negligible, but it masks significant heterogeneity across firms with different levels of pre-euro productivity. Our benchmark estimates indicate that the prices set by initially high-productivity firms rose on average by 8.9%. Our evidence further shows that these firms also raised their markups after euro adoption, whereas less efficient firms lowered their markups.