Evolution of Markups in the Manufacturing Industry of Turkiye

Authors : Eren Gürer, Pınar Derin Güre

Pages : 713-737

Doi:10.17065/huniibf.1555714

View : 104 | Download : 158

Publication Date : 2025-12-30

Article Type : Research Paper

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.
Keywords : Fiyat-Marjinal Maliyet Oranı, Piyasa Gücü, Kâr

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