Markups of Chinese exporters: Export discount and product choice

Economists find that exporters usually have higher markups than non-exporters. Our work, however, shows that Chinese exporters have lower markups than non-exporters in China. The result is economically and statistically significant. We argue that Chinese exporters have lower markups because they tend to produce products that usually have low markups. The finding is consistent with the hypothesis that China has a comparative advantage in low-markup products.