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Cited by 271

The DOI matches its Crossref record; 30 of the 30 references it cites were found in a registry or an index.

Capital Market Imperfections and Countercyclical Markups: Theory and Evidence

Open access
Chevalier, Judith, Scharfstein, David·1994·National Bureau of Economic Research
DOI 10.3386/w4614
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Abstract

During recessions, output prices tend to rise relative to wages and raw-materials prices.One explanation of this fact is that imperfectly competitive firms compete less aggressively during recessionsthat is, markups of price over marginal cost are countercyclical.We present a model in which markups are countercyclical because of capital-market imperfections.During recessions, liquidity-constrained firms try to boost short-run profits by raising prices to cut their investments in market share.We provide evidence from the supermarket industry in support of this theory.We show that during regional and macroeconomic recessions, the most financially constrained supermarket chains tend to raise their prices relative to less fmancially constrained chains.

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Metadata

Authors
Chevalier, J., & Scharfstein, D.
Venue
National Bureau of Economic Research
Publisher
National Bureau of Economic Research
Published
1994-01
Volume
86
Issue
4
Pages
703-725
DOI
10.3386/w4614
OpenAlex
W1633268707
Cited by
271
References
30
Type
report
Language
en
Open access
green

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CoChat. (2026). Citation check: Capital Market Imperfections and Countercyclical Markups: Theory and Evidence. https://app.cochat.ai/papers/10.3386/w4614
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Chevalier, J., & Scharfstein, D. (1994). Capital Market Imperfections and Countercyclical Markups: Theory and Evidence. National Bureau of Economic Research. https://doi.org/10.3386/w4614

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