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Exchange Rates and Corporate Pricing Strategies

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Author Info
Michael M. Knetter
Abstract

This paper reviews the recent literature on pass-through and pricing-to-market. Pricing-to market behavior is estimated for a new, larger data set with 60 German and 20 U.S. 7-digit industries. The results conform closely to what has been found elsewhere in smaller detailed data sets and at higher levels of aggregation. German exporters show more tendency to price-to-market than U.S. exporters for the sample of industries studied, but there is much variation across the industries. Surprisingly, pricing-to-market is more pronounced in German exports of steel and chemicals than in consumer goods.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4151.

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Date of creation: Aug 1992
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Handle: RePEc:nbr:nberwo:4151

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Kasa, Kenneth, 1992. "Adjustment costs and pricing-to-market theory and evidence," Journal of International Economics, Elsevier, vol. 32(1-2), pages 1-30, February. [Downloadable!] (restricted)
  2. Knetter, Michael M, 1989. "Price Discrimination by U.S. and German Exporters," American Economic Review, American Economic Association, vol. 79(1), pages 198-210, March. [Downloadable!] (restricted)
  3. Paul Krugman, 1986. "Pricing to Market when the Exchange Rate Changes," NBER Working Papers 1926, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Baron, David P, 1976. "Fluctuating Exchange Rates and the Pricing of Exports," Economic Inquiry, Oxford University Press, vol. 14(3), pages 425-38, September.
  5. Dixit, Avinash K, 1989. "Hysteresis, Import Penetration, and Exchange Rate Pass-Through," The Quarterly Journal of Economics, MIT Press, vol. 104(2), pages 205-28, May. [Downloadable!] (restricted)
  6. Giovannini, Alberto, 1988. "Exchange rates and traded goods prices," Journal of International Economics, Elsevier, vol. 24(1-2), pages 45-68, February. [Downloadable!] (restricted)
  7. Feenstra, Robert C., 1989. "Symmetric pass-through of tariffs and exchange rates under imperfect competition: An empirical test," Journal of International Economics, Elsevier, vol. 27(1-2), pages 25-45, August. [Downloadable!] (restricted)
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  8. Kravis, Irving B & Lipsey, Robert E, 1977. "Export Prices and the Transmission of Inflation," American Economic Review, American Economic Association, vol. 67(1), pages 155-63, February. [Downloadable!] (restricted)
  9. Klemperer, Paul, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, MIT Press, vol. 102(2), pages 375-94, May. [Downloadable!] (restricted)
  10. Michael M. Knetter, 1992. "International Comparisons of Pricing-to-Market Behavior," NBER Working Papers 4098, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Dornbusch, Rudiger, 1987. "Exchange Rates and Prices," American Economic Review, American Economic Association, vol. 77(1), pages 93-106, March.
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  12. Goldstein, Morris & Khan, Mohsin S., 1985. "Income and price effects in foreign trade," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 2, chapter 20, pages 1041-1105 Elsevier. [Downloadable!] (restricted)
  13. Sven W. Arndt & J. David Richardson, 1988. "Real-Financial Linkages Among Open Economies," NBER Working Papers 2230, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. Marston, Richard C., 1990. "Pricing to market in Japanese manufacturing," Journal of International Economics, Elsevier, vol. 29(3-4), pages 217-236, November. [Downloadable!] (restricted)
  15. Dunn, Robert M, Jr, 1970. "Flexible Exchange Rates and Oligopoly Pricing: A Study of Canadian Markets," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 140-51, Jan.-Feb.. [Downloadable!] (restricted)
  16. Meese, Richard, 1990. "Currency Fluctuations in the Post-Bretton Woods Era," Journal of Economic Perspectives, American Economic Association, vol. 4(1), pages 117-34, Winter. [Downloadable!] (restricted)
  17. Feenstra, Robert C, 1988. "Quality Change under Trade Restraints in Japanese Autos," The Quarterly Journal of Economics, MIT Press, vol. 103(1), pages 131-46, February. [Downloadable!] (restricted)
  18. Froot, Kenneth A & Klemperer, Paul D, 1989. "Exchange Rate Pass-Through When Market Share Matters," American Economic Review, American Economic Association, vol. 79(4), pages 637-54, September. [Downloadable!] (restricted)
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  19. Richard Baldwin, 1988. "Hysteresis In Import Prices: The Beachhead Effect," NBER Working Papers 2545, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  20. Varian, Hal R., 1989. "Price discrimination," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 10, pages 597-654 Elsevier. [Downloadable!] (restricted)
  21. Isard, Peter, 1977. "How Far Can We Push the "Law of One Price"?," American Economic Review, American Economic Association, vol. 67(5), pages 942-48, December. [Downloadable!] (restricted)
  22. Catherine L. Mann, 1986. "Prices, profit margins, and exchange rates," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jun, pages 366-379.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Emilia Penkova, 2005. "Exchange rates and transition economies` export prices: is there evidence for pricing-to-market behaviour?," Discussion Papers in Economics 05_02, University of Dortmund, Department of Economics. [Downloadable!]
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