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Determinants of domestic and import prices in Canadian manufacturing industries

  • Stanley W. Kardasz

    ()

    (Department of Economics, University of Waterloo, Waterloo, Ontario, Canada, N2L 3G)

  • Kenneth R. Stollery

    ()

    (Department of Economics, University of Waterloo, Waterloo, Ontario, Canada, N2L 3G)

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    This paper examines the determinants of the prices of domestic and imported goods in the domestic market using time-series data for a broad sample of Canadian manufacturing industries. It is found that the costs of both goods are the fundamental determinants of their prices, that the pass-through of costs into prices depends on the levels of domestic and import costs, real income per capita and concentration, and that factors which increase the sensitivity of both prices to domestic costs also reduce their sensitivity to import costs. In addition, it appears that the way in which prices are determined differs between industries with low versus high advertising-sales ratios.

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    Article provided by Springer in its journal Empirical Economics.

    Volume (Year): 23 (1998)
    Issue (Month): 4 ()
    Pages: 593-610

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    Handle: RePEc:spr:empeco:v:23:y:1998:i:4:p:593-610
    Note: received: July 1996/final version received July 1997
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