The same methods we have used above can be applied to measure the markup on Hong Kong re-exports to any other country. In Table 3 we report the results for re-exports from China to Germany, Japan, and the United Kingdom. In each case, we calculate the markups from methods A and C, since the results for method В – which gives the markup for re-exports from China to the entire world – do not depend on the country of destination. (The results for method В in Table 2 therefore are unaffected when the country of destination changes). It can be seen that the markups for re-exports to Germany are slightly larger than those for the United States, while the markups for Japan are larger still, and the markups to the United Kingdom are somewhat smaller. Overall, the differences with the markups obtained for the United States are not that great, especially as compared to the year-to-year fluctuation in the estimated markups for any country.10 Method С continues to give smaller estimates of the markup as compared to method A is virtually all cases, and it is our preferred estimate.
We note that the markup for re-exports to the U.S. estimated by Method С in Table 2 shows a broad decline over the 1988-94 period, going from 28 percent in 1988 to 25 percent in 1991, and then to 22 percent in 1994 (though increasing in 1995). This secular decline in markup is consistent with the competitive effects of more firms entering into the re-export industry over time. However, this is only a conjecture because the markup for re-exports to Germany, Japan, and the United Kingdom appears to be, respectively, trendless, increasing over time, and decreasing slightly over time. In work under progress, we are determining how much each of the movements of the national average markup could be attributable to movements in the markup of particular products (i.e. markup is unstable but composition of products is stable), and to changes in the composition of re-exports (i.e. composition of products is unstable but individual markup is stable). payday loans direct lenders