Author(s)

Zhenxiang Chen ¹, Youhao Sun ²

Affiliation(s)

¹ School of Tourism and Convention & Exhibition, Hefei University, Hefei, China
² School of Hydraulic Engineering, Anhui Water Conservancy Technical College, Hefei, China

Corresponding Author

Youhao Sun

ABSTRACT

Under the dual backdrop of escalating corporate competitive pressures and China's domestic efforts to build a consumption-oriented society, domestic enterprises need to continuously increase their  markup rates while persistently reducing marginal costs to enhance product competitiveness and market power. An increasing number of scholars are now focusing on the importance of corporate  markup rates, adopting diverse methodologies to quantify these rates and studying how to improve them to provide better guidance for micro-level enterprises, particularly micro and small businesses. The enhancement of enterprise productivity relies on multiple factors, including wage and benefit growth, the adoption of automation, and improvements in societal average productivity, all of which influence cost markup rates through various pathways. To investigate these dynamics, this study employs microdata from the 2000–2006 China Industrial Enterprise Database at the firm level and adopts an empirical approach to examine the impact of enterprise productivity on  markup rates. The research demonstrates that enterprises should focus on improving productivity to elevate their  markup rates, thereby achieving enhanced competitiveness and reduced marginal costs.

KEYWORDS

Firm Productivity, Firm Markup Rate, Marginal Cost, Corporate, Transformation

CITE THIS PAPER

Zhenxiang Chen, Youhao Sun, Chinese Firms' Productivity and Markup Rates. Industrial Engineering and Innovation Management (2025) Vol. 8: 10-15. DOI: http://dx.doi.org/10.23977/ieim.2025.080202.

REFERENCES

[1] Liu, X. H. (2021). Industrial agglomeration, regional institutional environment, and cost markup rate. Journal of Zhongnan University of Economics and Law, (6), 127-141. 
[2] Wang, P., & Huang, L. J. (2025). Institutional openness and enterprise cost markup rate: Evidence from a quasi-natural experiment. Journal of Finance and Accounting Communications, (6), 79-83.
[3] Sheng, D., & Liu, Z. Q. (2017). Exchange rate fluctuations, processing trade, and cost markup rate of Chinese enterprises. The World Economy, (1), 3-24.
[4] Mao, Q. L., & Xu, J. Y. (2017). Does intermediate goods trade liberalization improve enterprise markup rate? Evidence from China. China Economic Quarterly, 16(2), 485-524.
[5] Lu, Y., & Yu, L. H. (2015). Trade liberalization and markup dispersion: Evidence from China's WTO accession. American Economic Journal: Applied Economics, 7(4), 221-253.
[6] Yu, M. J. (2011). Processing trade, enterprise productivity, and tariff reduction. China Economic Quarterly, 10(4), 1251-1280.
[7] Tian, W., & Yu, M. J. (2012). Enterprise productivity and outward foreign direct investment: An empirical study based on firm-level data. China Economic Quarterly, 11(2), 308-408.
[8] Liu, Q. R., & Huang, J. Z. (2015). Heterogeneous export propensity, learning effects, and the "low markup rate trap". Economic Research Journal, (12), 143-157.
[9] Sheng, D., & Wang, Y. J. (2012). The mystery of low-price exports by Chinese enterprises: A perspective from enterprise markup rates. Management World, (5), 8-23.
[10] Geng, W., & Wei, R. (2019). Income inequality and cost markup rates of Chinese manufacturing enterprises. International Business (Journal of University of International Business and Economics), (6), 107-122.

Sponsors, Associates, and Links

---

• Information Systems and Economics
  
  
• Accounting, Auditing and Finance
  
  
• Tourism Management and Technology Economy
  
  
• Journal of Computational and Financial Econometrics
  
  
• Financial Engineering and Risk Management
  
  
• Accounting and Corporate Management
  
  
• Social Security and Administration Management
  
  
• Population, Resources & Environmental Economics
  
  
• Statistics & Quantitative Economics
  
  
• Agricultural & Forestry Economics and Management
  
  
• Social Medicine and Health Management
  
  
• Land Resource Management
  
  
• Information, Library and Archival Science
  
  
• Journal of Human Resource Development
  
  
• Manufacturing and Service Operations Management
  
  
• Operational Research and Cybernetics