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How exporters set prices: evidence from a large behavioural survey

Listed author(s):
  • Parker, Miles

This paper uses a survey of 1281 New Zealand exporters to investigate the role of firm characteristics in setting export prices. Larger, and more productive firms, are more likely to differentiate prices across markets. Primary sector firms are more likely to price to market than firms in other sectors, even taking into account other firm characteristics. This contrasts sharply with the commonly-held view that the price of these products is determined on the international market. In a further contribution to the literature, we find that service sector firms can also price to market, at similar rates to manufacturers. JEL Classification: E30, F31, F41

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File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp1974.en.pdf
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Paper provided by European Central Bank in its series Working Paper Series with number 1974.

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Date of creation: Nov 2016
Handle: RePEc:ecb:ecbwps:20161974
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  2. Andrew Atkeson & Ariel Burstein, 2008. "Pricing-to-Market, Trade Costs, and International Relative Prices," American Economic Review, American Economic Association, vol. 98(5), pages 1998-2031, December.
  3. repec:hrv:faseco:30703874 is not listed on IDEAS
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  10. Richard Fabling & Arthur Grimes, 2015. "Over the Hedge: Do Exporters Practice Selective Hedging?," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 35(4), pages 321-338, April.
  11. Betts, Caroline & Devereux, Michael B., 1996. "The exchange rate in a model of pricing-to-market," European Economic Review, Elsevier, vol. 40(3-5), pages 1007-1021, April.
  12. Richard Fabling & Lynda Sanderson, 2015. "Export Performance, Invoice Currency and Heterogeneous Exchange Rate Pass-through," The World Economy, Wiley Blackwell, vol. 38(2), pages 315-339, February.
  13. Silvia Fabiani & Martine Druant & Ignacio Hernando & Claudia Kwapil & Bettina Landau & Claire Loupias & Fernando Martins & Thomas Mathä & Roberto Sabbatini & Harald Stahl & Ad Stokman, 2006. "What Firms' Surveys Tell Us about Price-Setting Behavior in the Euro Area," International Journal of Central Banking, International Journal of Central Banking, vol. 2(3), September.
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  15. Shabtai Donnenfeld & Alfred A. Haug, 2008. "Currency invoicing of US imports," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 13(2), pages 184-198.
  16. Miles Parker, 2014. "Price-setting behaviour in New Zealand," Reserve Bank of New Zealand Discussion Paper Series DP2014/04, Reserve Bank of New Zealand.
  17. Giancarlo Corsetti & Luca Dedola, 2002. "Macroeconomics of international price discrimination," International Finance Discussion Papers 744, Board of Governors of the Federal Reserve System (U.S.).
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  20. Raphael Auer & Thomas Chaney, 2009. "Exchange Rate Pass-Through in a Competitive Model of Pricing-to-Market," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(s1), pages 151-175, February.
  21. Fabiani, Silvia & Hernando, Ignacio & Loupias, Claire & Mathä, Thomas Y. & Sabbatini, Roberto & Landau, Bettina & Stokman, Ad C.J. & Druant, Martine & Kwapil, Claudia & Stahl, Harald & Martins, Fernan, 2005. "The pricing behaviour of firms in the euro area: new survey evidence," Working Paper Series 535, European Central Bank.
  22. Richard Fabling & Arthur Grimes & Philip Stevens, 2012. "The relatives are fine: use of qualitative firm data in economic analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 19(7), pages 615-618, May.
  23. Dornbusch, Rudiger, 1987. "Exchange Rates and Prices," American Economic Review, American Economic Association, vol. 77(1), pages 93-106, March.
  24. Li, Hongbin & Ma, Hong & Xu, Yuan, 2015. "How do exchange rate movements affect Chinese exports? — A firm-level investigation," Journal of International Economics, Elsevier, vol. 97(1), pages 148-161.
  25. Doireann Fitzgerald & Stefanie Haller, 2014. "Pricing-to-Market: Evidence From Plant-Level Prices," Review of Economic Studies, Oxford University Press, vol. 81(2), pages 761-786.
  26. Greenslade, Jennifer & Parker, Miles, 2010. "New insights into price-setting behaviour in the United Kingdom," Bank of England working papers 395, Bank of England.
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