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Has the Export Pricing Behaviour of German Enterprises Changed? Empirical Evidence from German Sectoral Export Prices

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  • Kerstin Stahn

    ()
    (Deutsche Bundesbank, Frankfurt am Main)

Abstract

The 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 Info

Article 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)
Pages: 295-329

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Handle: RePEc:jns:jbstat:v:227:y:2007:i:3:p:295-329

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Keywords: Export pricing; cost pass-through; pricing-to-market; Germany;

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References

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Citations

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Cited by:
  1. Ansgar Belke & Matthias Göcke & Martin Günther, 2012. "Exchange Rate Bands of Inaction and Play-Hysteresis in German Exports: Sectoral Evidence for Some OECD Destinations," Discussion Papers of DIW Berlin 1203, DIW Berlin, German Institute for Economic Research.
  2. Tim Laing & Misato Sato & Michael Grubb & Claudia Comberti, 2013. "Assessing the effectiveness of the EU Emissions Trading System," Grantham Research Institute on Climate Change and the Environment Working Papers 106, Grantham Research Institute on Climate Change and the Environment.
  3. Ansgar Belke & Matthias Goecke & Martin Guenther, 2009. "When Does It Hurt? The Exchange Rate "Pain Threshold" for German Exports," Ruhr Economic Papers 0148, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  4. Ceglowski, Janet, 2010. "Has pass-through to export prices risen? Evidence for Japan," Journal of the Japanese and International Economies, Elsevier, vol. 24(1), pages 86-98, March.
  5. Kerstin Stahn, 2011. "Changes in Import Pricing Behaviour: Evidence for Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 231(4), pages 522-545, August.
  6. Stahn, Kerstin, 2009. "Changes in import pricing behaviour: the case of Germany," Discussion Paper Series 1: Economic Studies 2009,14, Deutsche Bundesbank, Research Centre.

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