Export prices and markups with a common currency: Empirical evidence from Greek exporting firms and euro adoption

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.