SavedAdd your journal

Journals / Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi / 2025 / Cilt: 43 Sayı: 4

Evolution of Markups in the Manufacturing Industry of Turkiye

Türkiye İmalat Sanayinde Fiyat-Marjinal Maliyet Oranlarının Gelişimi

Eren Gürer(MIDDLE EAST TECHNICAL UNIVERSITY)0000-0001-8238-1967
Pınar Derin Güre(MIDDLE EAST TECHNICAL UNIVERSITY)0000-0001-6128-5116
Pages
713–737
Publication Date
2025-12-30
🏛️Bibliographic metadata and full text access for this article are provided via DergiPark.
DergiPark Record ↗
✨

AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

As such, it may be fruitful for the competition policy to delve deeper into the root causes of the post-2016 surge in markups among high-markup firms, as well as the changing market composition.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:In this study, we aim to estimate markups and the evolution of labor and profit shares in the manufacturing industry of Türkiye over 2007-2021 using an administrative firm-level dataset, the Entrepreneurship Information System (EIS), which covers the universe of firms and contains detailed balance sheet information.
📊
Key Findings & Data:Until 2016, there was a general decline in markups.
💡
Conclusion & Impact:As such, it may be fruitful for the competition policy to delve deeper into the root causes of the post-2016 surge in markups among high-markup firms, as well as the changing market composition.
🔬Design:Araştırma Makalesi
📍Scope:2007-2021 Verileri
⚙️Variables:Fiyat-Marjinal Maliyet Oranı · Piyasa Gücü · Kâr

Abstract

In this study, we aim to estimate markups and the evolution of labor and profit shares in the manufacturing industry of Türkiye over 2007-2021 using an administrative firm-level dataset, the Entrepreneurship Information System (EIS), which covers the universe of firms and contains detailed balance sheet information. We employ the production function approach to estimate markups. Until 2016, there was a general decline in markups. Concurrently, the gross profit rate increases slightly, and the labor share of value added remains relatively stable. However, since 2016, which corresponds to the era of high inflation, there has been a notable surge in gross profit rates alongside a significant decrease in the labor share. The primary catalyst for these post-2016 shifts is attributed to firms positioned in the upper percentiles of the markup distribution, which successfully increased their markups and their share in total value-added during this period. As such, it may be fruitful for the competition policy to delve deeper into the root causes of the post-2016 surge in markups among high-markup firms, as well as the changing market composition.

Özet

Bu çalışmada, 2007-2021 yılları arasında Türkiye imalat sanayinde fiyat-marjinal maliyet oranları (markup) ile birlikte işgücü ve kâr paylarının gelişiminin tahmin edilmesi amaçlanmaktadır. Bu doğrultuda, Türkiye’de kayıtlı tüm firmaların detaylı bilanço bilgilerini içeren idari veri seti Girişimci Bilgi Sistemi’nden (GBS) faydalanılmaktadır. Markup tahmininde üretim fonksiyonu yaklaşımı kullanılmaktadır. Tahminleriniz, 2016 yılına kadar markup seviyelerinde genel bir düşüşe işaret etmektedir. Aynı dönemde, brüt kâr oranı hafif bir artış gösterirken, katma değerdeki işgücü payı nispeten sabit kalmaktadır. Ancak, yüksek enflasyon dönemine denk gelen 2016 yılından itibaren brüt kâr oranlarında belirgin bir artış ve işgücü payında önemli bir azalma yaşanmıştır. Bu dönemdeki değişimlerin temel itici gücü, markup dağılımının üst yüzdelerinde yer alan firmaların markup’larını ve toplam katma değer içindeki paylarını artırmaları olmuştur. Bu nedenle, rekabet politikasının, 2016 sonrası yüksek markup’lı firmaların marjlarındaki artışın ve değişen piyasa yapısının sepeblerini derinlemesine incelemesi faydalı olabilir.

🔖

Cite This Article

Gürer, E., Güre, P. D. (2025). Evolution of Markups in the Manufacturing Industry of Turkiye. Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, Cilt: 43 Sayı: 4, 713–737. https://doi.org/10.17065/huniibf.1555714

📄 Full Text PDF Viewer

📄

PDF görüntüleyici hazırlanıyor...

References (29)

  1. Ackerberg, DA., Caves, K. & Frazer, G. (2015). Identification properties of recent production function estimators. Econometrica, 83(6), 2411-2451. https://doi.org/10.3982/ECTA13408
  2. Akcigit, U., Akgunduz YE., Cilasun, SM., Ozcan-Tok,E., & Yilmaz, F. (2020). Factors on business dynamism in Turkey. European Economic Review, 128, 103490. https://doi.org/10.1016/j.euroecorev.2020.103490
  3. Akcigit, U., Chen, W., Diez, FJ., Duval, R., Engler, P., Fan, J., Maggi, C., Tavares, MM., Schwarz, D., Shibata, I., & Villegas-Sánchez, C. (2021). Rising corporate market power: Emerging policy issues, International Monetary Fund Discussion Note, SDN/21/01.
  4. Berry, ST., Levinsohn, JA., & Pakes, A. (1995). Automobile prices in market equilibrium, Econometrica, 63(4), 841-890. https://doi.org/10.2307/2171802
  5. Boar, C., & Midrigan, V. (2024). Markups and inequality, The Review of Economic Studies, 92(5), 2828-2860. https://doi.org/10.1093/restud/rdae103
  6. Bouras, P., Bustamante, C., Gu, X., & Short, J. (2023). The contribution of firm profits to the recent rise in inflation, Economics Letters, 233, 111449. https://doi.org/10.1016/j.econlet.2023.111449
  7. Calligaris, S., Criscuolo, C., & Marcolin, L. (2018). Mark-ups in the digital era, OECD (Organisation for Economic Co-operation and Development) Science, Technology and Industry Working Papers, No. 2018/10, OECD Publishing, https://doi.org/10.1787/4efe2d25-en
  8. Card, D., Heining, J., & Kline, P. (2013). Workplace heterogeneity and the rise of West German wage inequality, The Quarterly Journal of Economics, 128(3), 967-1015. https://doi.org/10.1093/qje/qjt006
  9. De Loecker, J., & Warzynski, F. (2012). Markups and firm-level export status, American Economic Review, 102(6), 2437–2471. 10.1257/aer.102.6.2437
  10. De Loecker, J., & Eeckhout, J. (2018). Global market power, National Bureau of Economic Research Working Paper No. w24768.
  11. De Loecker, J., Eeckhout, J., & Unger, G. (2020). The rise of market power and the macroeconomic implications, The Quarterly Journal of Economics, 135(2), 561-644. https://doi.org/10.1093/qje/qjz041
  12. De Ridder, M., Grassi, B. & Morzenti, G. (2022). The hitchhiker’s guide to markup estimation, Working Paper.
  13. Diez, FJ., Leigh, D., & Tambunlertchai, S. (2018). Global market power and its macroeconomic implications, International Monetary Fund Working Paper No. 18/137. https://doi.org/10.5089/9781484361672.001
  14. Diez, FJ., Fan, J. & Villegas-Sánchez, C. (2019). Global declining competition, International Monetary Fund Working Paper No. 19/82. https://doi.org/10.5089/9781498311113.001
  15. Eeckhout, J., Fu, C., Li, W., & Weng, X. (2024). Optimal taxation and market power, Working Paper. Ennis, SF., Gonzaga, P., & Pike, C. (2019). Inequality: a hidden cost of market power, Oxford Review of Economic Policy, 35(3), 518-549. https://doi.org/10.1093/oxrep/grz017
  16. Hall, RE. (1988). The relation between price and marginal cost in US industry, Journal of Political Economy, 96(5), 921-947.
  17. Hansen, NJ., Toscani, F. & Zhou, J. (2023). Euro Area inflation after the pandemic and energy shock: import prices, profits and wages, International Monetary Fund Working Paper No 23/131. https://doi.org/10.5089/9798400245473.001
  18. Leduc, S., Li, H. & Liu, Z. (2024). Are markups driving the ups and downs of inflation?, Federal Reserve Bank of San Francisco Economic Letter, 2024-12, 1-5.
  19. Levinsohn, J. & Petrin, A. (2003). Estimating production functions using inputs to control for unobservables, The Review of Economic Studies, 70(2), 317-341. https://doi.org/10.1111/1467-937X.00246
  20. Han, M., & Pyun, JH. (2021). Markups and income inequality: Causal links, 1975-2011, Journal of Comparative Economics, 49, 290-312. https://doi.org/10.1016/j.jce.2020.12.002
  21. Olley, GS., & Pakes, A. (1996). The dynamics of productivity in the telecommunications equipment industry, Econometrica, 64(6), 1263-1297. https://doi.org/10.2307/2171831
  22. Pismaf, S. (2023). The evolution of market power and its relation with inflation in Turkiye (Unpublished master’s thesis), Hacettepe University Graduate School of Social Sciences, Department of Economics.
  23. Rovigatti, G., & Mollisi, M. (2018). Theory and practice of total-factor productivity estimation: The control function approach using Stata, The Stata Journal, 18(3), 618-662. https://doi.org/10.1177/1536867X1801800307
  24. Song, J., Price, DJ., Guvenen, F., Bloom, N. & von Wachter, T. (2019). Firming up inequality, The Quarterly Journal of Economics, 134(1), 1-50. https://doi.org/10.1093/qje/qjy025
  25. Taymaz, E. & Yilmaz, K. (2015). Estimating plant-level marginal costs and markups in the Turkish manufacturing industry, Middle East Technical University, Economic Research Center Working Paper.
  26. Unveren, B. & Sunal, S. (2015). Why is the labor share so low in Turkey? The Developing Economies, 53(4), 272-288. https://doi.org/10.1111/deve.12089
  27. Yilmaz, E. & Kaplan, Z. (2022). Heterogeneity of market power: Firm-level evidence, Economic Change and Restructuring, 55(2), 1207-1228. https://doi.org/10.1007/s10644-021-09350-8
  28. Weche, JP., & Wambach, A. (2018). The fall and rise of market power in Europe, Jahrbücher für Nationalökonomie und Statistik, 241(5-6), 555-575. https://doi.org/10.1515/jbnst-2020-0047
  29. Akcigit, U., Akgunduz YE., Cilasun, SM., Ozcan-Tok,E., & Yilmaz, F. (2020). Factors on business dynamism in Turkey. European Economic Review, 128, 103490. https://doi.org/10.1016/j.euroecorev.2020.103490