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Markets Shares, Financial Constraints, and Pricing Behavior in the Export Market

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  • Gottfries, Nils

    ()
    (Department of Economics)

Abstract

A parsimonious structural model of price and quantity dynamics is applied to Swedish exports and export prices for manufactured goods 1972-1996. Two sources of dynamics are considered: customer markets and pre-set prices. The dynamic adjustment of exports is very much in line with what the customer market model predicts: the market share adjusts slowly after a change in the relative price. Prices are sticky in the sense that they do not reflect the most recent information about costs and exchange rates. Prices are high when firms are borrowing heavily, supporting the argument in Gottfries (1991) that financial constraints affect pricing behavior.

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Bibliographic Info

Paper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 1999:15.

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Length: 32 pages
Date of creation: 10 Sep 1999
Date of revision:
Publication status: Published in Economica, 2002, pages 583-607.
Handle: RePEc:hhs:uunewp:1999_015

Contact details of provider:
Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
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Web page: http://www.nek.uu.se/
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Keywords: exports; market share; customer; export price; price setting; markup; sticky price; financial constraints;

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