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Swedish Export Price Determination: Pricing to Market Shares?

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  • Adolfson, Malin

    ()
    (Department of Economics, Stockholm School of Economics)

Abstract

The Swedish export price determination for automobiles and kraft paper to three destination countries, over the period 1980-1994, is investigated. Formal tests on an error correction model indicate results consistent with price discrimination in Swedish exports of both goods. The exporters use their market power for pricing to market, which is characterized by the concern for foreign conditions, and implies an incomplete exchange rate pass-through. The pricing behaviour seems to be determined by the development of market shares, in about half of the cases. The total pass-through to the local currency price within a year, that is the effect of an exchange rate change working through all variables and all interactions in the price determination, span between -85 % and +111 %.

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Bibliographic Info

Paper provided by Sveriges Riksbank (Central Bank of Sweden) in its series Working Paper Series with number 96.

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Length: 53 pages
Date of creation: 01 Oct 1999
Date of revision:
Publication status: Published in Economics Letters, 2001, pages 91-96.
Handle: RePEc:hhs:rbnkwp:0096

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Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Phone: 08 - 787 00 00
Fax: 08-21 05 31
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Web page: http://www.riksbank.com/
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Keywords: Cointegration; Exchange rates; Export prices; Market shares; Pass-through; Pricing to market;

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References

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  1. Robert C. Feenstra & Joseph E. Gagnon & Michael M. Knetter., 1993. "Market share and exchange rate pass-through in world automobile trade," International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.) 446, Board of Governors of the Federal Reserve System (U.S.).
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Citations

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Cited by:
  1. Westlund, Hans & Johansson, Magnus & Molinder, Jonas, 2000. "Exchange Rate Sensitivity Of Swedish Regions," ERSA conference papers ersa00p140, European Regional Science Association.
  2. Brissimis, Sophocles N. & Kosma, Theodora, 2005. "Market power, innovative activity and exchange rate pass-through in the euro area," Working Paper Series, European Central Bank 0531, European Central Bank.
  3. 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.
  4. Tantirigama, Mangalika & Lee, Minsoo & Sanyal, Amal, 2008. "New Zealand's Pastoral Exports: Can Small Countries Practise Pricing-to-Market?," Review of Applied Economics, Review of Applied Economics, Review of Applied Economics, vol. 4(1-2).
  5. Adolfson, Malin, 2001. "Export price responses to exogenous exchange rate movements," Economics Letters, Elsevier, Elsevier, vol. 71(1), pages 91-96, April.
  6. Brissimis, Sophocles N. & Kosma, Theodora S., 2007. "Market power and exchange rate pass-through," International Review of Economics & Finance, Elsevier, Elsevier, vol. 16(2), pages 202-222.
  7. Roberto Basile & Sergio de Nardis & Alessandro Girardi, 2009. "Pricing to market of Italian exporting firms," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 41(12), pages 1543-1562.
  8. Sophocles N. Brissimis & Theodora S. Kosma, 2006. "Market Conduct, Price Interdependence and Exchange Rate Pass-Through," Working Papers, Bank of Greece 51, Bank of Greece.

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