Has the Export Pricing Behaviour of German Enterprises Changed? Empirical Evidence from German Sectoral Export Prices
AbstractThe question as to whether the globalisation-related increase in competitive pressure may have caused the importance of cost pass-through (CPT) and pricing-to-market (PTM) for export pricing in Germany to shift since the 1990s is addressed by testing the long-run export pricing behaviour of German enterprises for changes in the impact of its determinants. As globalisation may have affected competitive pressure in individual product markets differently, export pricing is analysed for 11 product categories. Analytically, this problem is solved by applying the Saikkonen (1991) approach to estimate the individual export price categories in single equations. The first hypothesis - that CPT is stronger, and PTM weaker, for heterogeneous products than for homogeneous products - is found to hold more for CPT than for PTM. The second hypothesis, which presumes that CPT has weakened and PTM has strengthened since the 1990s, is confirmed with respect to the overall outcome, although for several product categories the results conflict with the hypothesis. Moreover, error correction models are used to test exporters' short-run price-setting behaviour for asymmetry, ie whether short-run increases in the export price determinants are passed through to a different extent than decreases. It is shown that symmetric export pricing is seldom rejected.
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Bibliographic InfoArticle provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.
Volume (Year): 227 (2007)
Issue (Month): 3 (June)
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Export pricing; cost pass-through; pricing-to-market; Germany;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
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