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Emu And Forest Products Pricing And Europe

Author

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  • Hanninen, Riitta
  • Laaksonen-Craig, Susanna
  • Toppinen, Anne

Abstract

In previous literature, the degree of exchange rate pass-through to importing country's currency has often been found to be incomplete, which supports the idea of imperfect competition in the forest products markets. In this study, exchange rate pass-through is examined by employing a mark-up model for the UK and German pulp and newsprint markets for 1986-97. Two specifications are compared, one where exchange rates in importing countries are employed and the other that attributes for the fact that US dollar is largely used in pricing for forest industry products in Europe. In contrast to previous studies, our estimates indicate very low degrees of pass-through, which is consistent with competitive European markets for pulp and paper. Consequently, depreciations of exchange rates are found to be mainly transmitted to variable mark-ups over wood prices rather than to prices in importer's currency. Furthermore, the use of the US dollar nominated pricing is found to have practically no effect at all on this result.

Suggested Citation

  • Hanninen, Riitta & Laaksonen-Craig, Susanna & Toppinen, Anne, 2000. "Emu And Forest Products Pricing And Europe," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36502, Western Agricultural Economics Association.
    • Handle: RePEc:ags:waeava:36502
    DOI: 10.22004/ag.econ.36502
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    References listed on IDEAS

    as
    1. Daniel H. Pick & Colin A. Carter, 1994. "Pricing to Market with Transactions Denominated in a Common Currency," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(1), pages 55-60.
    2. Rtta Hanninen & Anne Toppinen, 1999. "Long-run price effects of exchange rate changes in Finnish pulp and paper exports," Applied Economics, Taylor & Francis Journals, vol. 31(8), pages 947-956.
    3. Hung, Wansing & Kim, Yoonbai & Ohno, Kenichi, 1993. "Pricing exports: a cross-country study," Journal of International Money and Finance, Elsevier, vol. 12(1), pages 3-28, February.
    4. Peter Hooper & Catherine L. Mann, 1989. "Exchange Rate Pass-through in the 1980s: The Case of U.S. Imports of Manufactures," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1), pages 297-337.
    5. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501, Decembrie.
    6. Janaki R.R. Alavalapati & Wiktor L. Adamowicz & Martin K. Luckert, 1997. "A Cointegration Analysis of Canadian Wood Pulp Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 975-986.
    7. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
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    Cited by:

    1. Guney, Selin, 2015. "An Analysis of the Pass-Through of Exchange Rates in Tropical Forest Product Markets: A Smooth Transition Approach," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205107, Agricultural and Applied Economics Association.

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