Abstract
VAT and Mark-Up Variations : An Empirical Analysis of Corporate Data Provided by French Exporters. We study how French exporters react to a VAT shock in a destination country. As VAT shocks are by nature almost permanent, exogenous, and without impact on marginal costs, the subsequent price reactionmakes it possible to identify a pure demand-led mark-up adjustment. The results of an analysis of French customs data for 1995-2005 indicate a 67% averagemark-up adjustment for consumer goods. The adjustment is greater for companies, sectors, and destinations with a relatively higher market share. We then use our estimates and the Atkeson-Burstein (2008) theoretical framework to derive the distribution of mark-up adjustments of the various sector-destination pairs.
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