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Determinants of domestic and import prices in Canadian manufacturing industries

Author

Listed:
  • Stanley W. Kardasz

    (Department of Economics, University of Waterloo, Waterloo, Ontario, Canada, N2L 3G)

  • Kenneth R. Stollery

    (Department of Economics, University of Waterloo, Waterloo, Ontario, Canada, N2L 3G)

Abstract

This paper examines the determinants of the prices of domestic and imported goods in the domestic market using time-series data for a broad sample of Canadian manufacturing industries. It is found that the costs of both goods are the fundamental determinants of their prices, that the pass-through of costs into prices depends on the levels of domestic and import costs, real income per capita and concentration, and that factors which increase the sensitivity of both prices to domestic costs also reduce their sensitivity to import costs. In addition, it appears that the way in which prices are determined differs between industries with low versus high advertising-sales ratios.

Suggested Citation

  • Stanley W. Kardasz & Kenneth R. Stollery, 1998. "Determinants of domestic and import prices in Canadian manufacturing industries," Empirical Economics, Springer, vol. 23(4), pages 593-610.
    • Handle: RePEc:spr:empeco:v:23:y:1998:i:4:p:593-610
    Note: received: July 1996/final version received July 1997
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    Citations

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    Cited by:

    1. John R. Baldwin & Beiling Yan, 2007. "Exchange Rate Cycles and Canada/US Manufacturing Prices," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(3), pages 508-533, October.
    2. Baldwin, John R. Yan, Beiling, 2006. "Influences intérieures et étrangères sur les prix canadiens selon les mouvements cycliques du taux de change, 1974 à 1996," Série de documents de recherche sur l'analyse économique (AE) 2006043f, Statistics Canada, Direction des études analytiques.
    3. Baldwin, John R. Yan, Beiling, 2006. "Domestic and Foreign Influences on Canadian Prices over Exchange Rate Cycles, 1974 to 1996," Economic Analysis (EA) Research Paper Series 2006043e, Statistics Canada, Analytical Studies Branch.
    4. Egon Žižmond & Matjaž Novak, 2006. "Impact of Price-Deregulation on Market Outcomes - The Case of Chimney Sweep Services in Slovenia," Prague Economic Papers, Prague University of Economics and Business, vol. 2006(4), pages 350-363.
    5. Baldwin, John R. Yan, Beiling, 2006. "Les mouvements cycliques du taux de change et les prix dans les secteurs canadien et américain de la fabrication," Série de documents de recherche sur l'analyse économique (AE) 2006041f, Statistics Canada, Direction des études analytiques.
    6. Harry Bloch & A. Michael Dockery & David Sapsford, 2006. "Commodity Prices and the Dynamics of Inflation in Commodity‐Exporting Nations: Evidence from Australia and Canada," The Economic Record, The Economic Society of Australia, vol. 82(s1), pages 97-109, September.
    7. Baldwin, John R. & Yan, Beiling, 2008. "Domestic and foreign influences on Canadian prices," International Review of Economics & Finance, Elsevier, vol. 17(4), pages 546-557, October.

    More about this item

    Keywords

    Pricing · pass-through · import competition;

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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