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Price discrimination within and across EMU markets: Evidence from French exporters

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  • Fontaine, François
  • Martin, Julien
  • Mejean, Isabelle

Abstract

We study the cross-sectional dispersion of prices paid by EMU importers for French products. We document a significant level of dispersion in unit values both within product categories across exporters, and within exporters across buyers. This latter source of price discrepancies, which we call price discrimination, reflects the ability of exporters to sell similar or differentiated varieties of a given product at different prices to different buyers. Price discrimination (i) is substantial within the EU, within the euro area, and within EMU countries; (ii) has not decreased over the last two decades; (iii) is more prevalent among the largest firms and for more differentiated products; (iv) is lower among retailers and wholesalers; (v) is also observed within almost perfectly homogenous product categories, which suggests that a non-negligible share of price discrimination is partly triggered by heterogeneous markups rather than quality or composition effects. We then estimate a rich statistical decomposition of the variance of prices to shed light on exporters' pricing strategies.

Suggested Citation

  • Fontaine, François & Martin, Julien & Mejean, Isabelle, 2020. "Price discrimination within and across EMU markets: Evidence from French exporters," Journal of International Economics, Elsevier, vol. 124(C).
  • Handle: RePEc:eee:inecon:v:124:y:2020:i:c:s0022199620300192
    DOI: 10.1016/j.jinteco.2020.103300
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    More about this item

    Keywords

    Price discrimination; Firm-to-firm trade;

    JEL classification:

    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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