Export prices and increasing world competition: evidence from French, German, and Italian pricing behavior
AbstractThe paper compares the export price strategies of France, Germany and Italy using a large and common pool of manufacturing products and destination markets. Our results suggest that pricing-to-market (PTM) is not widespread among French and German exporters, whereas Italian one do adopt more often such a pricing strategy. The standard claim that product specific characteristics play a major role in determining PTM finds little support in our result, which find almost no regularity across products. On the other hand, the hypothesis of an homogeneous behavior across destination countries (even for the same products) is strongly rejected. This suggests that export price changes are mainly determined by source and destination market characteristics. Something similar applies to profit margins as well: the latter move rather homogeneously across products but differently across destinations. Within this heterogeneity, we find that on average profit margins have either remained stable or augmented in the last three decades, so that increased international integration seems not to have reduced firms market power.
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Bibliographic InfoPaper provided by Observatoire Francais des Conjonctures Economiques (OFCE) in its series Documents de Travail de l'OFCE with number 2007-25.
Date of creation: 2007
Date of revision:
Other versions of this item:
- Sarah Guillou & Stefano Schiavo, 2007. "Export prices and increasing world competition : evidence from French, German and Italian pricing behavior," Sciences Po publications 2007-25, Sciences Po.
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-01-26 (All new papers)
- NEP-COM-2008-01-26 (Industrial Competition)
- NEP-EEC-2008-01-26 (European Economics)
- NEP-INT-2008-01-26 (International Trade)
- NEP-MIC-2008-01-26 (Microeconomics)
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