Advanced Search
MyIDEAS: Login

Exporters' Pricing Strategies: the Case of Italy

Contents:

Author Info

  • Bugamelli Matteo
  • Tedeschi Roberto

Abstract

Using Italian data over the period 1990-99, this paper estimates an export pricing equation along the lines traced in the Pricing-to-Market literature on exchange rate pass-through (ERPT). As compared to previous papers, we minimize aggregation and selection biases, by focusing on all destination markets (about 70) and all finely disaggregated products (700, according to the 4-digits of SITC). The results show a lot of heterogeneity. On average, ERPT is largely asymmetric: Italian exporters do not cut their profit margins and thus do not defend their market shares when the lira appreciates; they instead raise prices by about 30 per cent of the exchange variation after a lira depreciation. Distinguishing by markets and products, it emerges an incomplete ERPT in industrial markets and in the case of goods produced in "oligopolistic" industries (e.g., economies of scale, high-tech). The same occurs in those sectors where firms are on average larger and the evolution of productivity more favourable. In the traditional sectors (textile, clothing, shoes, etc.), and in the developing countries, where Italian presence is more fragmented, ERPT is almost complete and symmetric: this result may be due to entry-exit of small firms in those markets.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.rivisteweb.it/download/article/10.1429/25713
Download Restriction: no

File URL: http://www.rivisteweb.it/doi/10.1429/25713
Download Restriction: no

Bibliographic Info

Article provided by Società editrice il Mulino in its journal Politica economica.

Volume (Year): (2007)
Issue (Month): 3 ()
Pages: 321

as in new window
Handle: RePEc:mul:je8794:doi:10.1429/25713:y:2007:i:3:p:321

Contact details of provider:

Related research

Keywords: exchange rate pass-through; pricing-to-market; market structure.;

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Domenica Tropeano, 2011. "Income distribution, growth and financialization: the Italian case," Working Papers 65-2011, Macerata University, Department of Finance and Economic Sciences, revised Apr 2011.
  2. Matteo Bugamelli & Alfonso Rosolia, 2006. "Productivity and foreign competition," Temi di discussione (Economic working papers) 578, Bank of Italy, Economic Research and International Relations Area.
  3. Roberto Basile & Sergio de Nardis & Alessandro Girardi, 2006. "Pricing to market of Italian exporting firms," ISAE Working Papers 70, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
  4. Borin, Alessandro & Lamieri, Marco, 2007. "Estimating Product Quality in International Trade," MPRA Paper 14678, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:mul:je8794:doi:10.1429/25713:y:2007:i:3:p:321. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.