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Distance to destination and export price variation within agri-food firms

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  • Dela-Dem Doe

Abstract

This paper assesses how bilateral distance affects within-firm-product variation in free-on-board (FOB) export prices across destinations. I estimate linear models that regress firm-product-destination-time FOB unit values on distance, firm-product-time fixed effects and destination country controls. If distance doubles, the average Swiss agri-food firm increases its FOB export price by 2.3 per cent. However, the positive distance elasticity of export prices reflects product quality differences and/or variable markups. I disentangle both mechanisms and show that, for a given product quality, exporting firms charge higher markups in distant markets. Nevertheless, this form of price discrimination is less pronounced for higher-quality products.

Suggested Citation

  • Dela-Dem Doe, 2023. "Distance to destination and export price variation within agri-food firms," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(2), pages 563-590.
    • Handle: RePEc:oup:erevae:v:50:y:2023:i:2:p:563-590.
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    File URL: http://hdl.handle.net/10.1093/erae/jbac018
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