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Export prices and increasing world competition: evidence from French, German, and Italian pricing behavior

The paper compares the export price strategies of France, Germany and Italy using a large and common pool of manufacturing products and destination markets. Our results suggest that pricing-to-market (PTM) is not widespread among French and German exporters, whereas Italian one do adopt more often such a pricing strategy. The standard claim that product specific characteristics play a major role in determining PTM finds little support in our result, which find almost no regularity across products. On the other hand, the hypothesis of an homogeneous behavior across destination countries (even for the same products) is strongly rejected. This suggests that export price changes are mainly determined by source and destination market characteristics. Something similar applies to profit margins as well: the latter move rather homogeneously across products but differently across destinations. Within this heterogeneity, we find that on average profit margins have either remained stable or augmented in the last three decades, so that increased international integration seems not to have reduced firms market power.

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File URL: http://www.ofce.sciences-po.fr/pdf/dtravail/WP2007-25.pdf
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Paper provided by Observatoire Francais des Conjonctures Economiques (OFCE) in its series Documents de Travail de l'OFCE with number 2007-25.

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Date of creation: 2007
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Handle: RePEc:fce:doctra:0725
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  1. Falk, Rahel & Falk, Martin, 1998. "Pricing to market of German exporters: evidence from panel data," ZEW Discussion Papers 98-28, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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  3. Robert C. Feenstra & Joseph E. Gagnon & Michael M. Knetter, 1993. "Market share and exchange rate pass-through in world automobile trade," International Finance Discussion Papers 446, Board of Governors of the Federal Reserve System (U.S.).
  4. Joseph E. Gagnon & Michael M. Knetter, 1992. "Markup Adjustment and Exchange Rate Fluctuations: Evidence From Panel Data on Automobile Exports," NBER Working Papers 4123, National Bureau of Economic Research, Inc.
  5. Goldberg, Pinelopi Koujianou, 1995. "Product Differentiation and Oligopoly in International Markets: The Case of the U.S. Automobile Industry," Econometrica, Econometric Society, vol. 63(4), pages 891-951, July.
  6. Pinelopi K. Goldberg & Michael M. Knetter, 1996. "Goods Prices and Exchange Rates: What Have We Learned?," NBER Working Papers 5862, National Bureau of Economic Research, Inc.
  7. Stahn, Kerstin, 2006. "Has the export pricing behaviour of German enterprises changed? Empirical evidence from German sectoral prices," Discussion Paper Series 1: Economic Studies 2006,37, Deutsche Bundesbank, Research Centre.
  8. Jose Manuel Campa & Linda S. Goldberg, 2002. "Exchange Rate Pass-Through into Import Prices: A Macro or Micro Phenomenon?," NBER Working Papers 8934, National Bureau of Economic Research, Inc.
  9. Isabelle Méjean & Guillaume Gaulier & Amina Lahreche-Révil, 2008. "Exchange-rate pass-through at the product level," Post-Print hal-00363075, HAL.
  10. Bodnar, Gordon M. & Dumas, Bernard & Marston, Richard C., 2000. "Pass-through and Exposure," Working Papers 00-4, University of Pennsylvania, Wharton School, Weiss Center.
  11. Lourdes Moreno Martín & Diego Rodríguez Rodríguez, 2000. "Domestic and foreign price-marginal cost margins: An application to Spanish manufacturing firms," Working Papers 00-03, Asociación Española de Economía y Finanzas Internacionales.
  12. Saeid Mahdavi, 2002. "The response of the US export prices to changes in the dollar's effective exchange rate: further evidence from industry level data," Applied Economics, Taylor & Francis Journals, vol. 34(17), pages 2115-2125.
  13. Knetter, Michael M, 1989. "Price Discrimination by U.S. and German Exporters," American Economic Review, American Economic Association, vol. 79(1), pages 198-210, March.
  14. Jeffrey I. Bernstein & Pierre Mohnen, 1991. "Price-Cost Margins, Exports and Productivity Growth: With an Application to Canadian Industries," Canadian Journal of Economics, Canadian Economics Association, vol. 24(3), pages 638-59, August.
  15. André Sapir, 2005. "Un modello obsoleto? Crescita e specializzone dell'economia italiana," ULB Institutional Repository 2013/8122, ULB -- Universite Libre de Bruxelles.
  16. Asplund, Marcus & Eriksson, Rickard & Strand, Niklas, 2001. "Price Discrimination in Oligopoly: Evidence from Swedish Newspapers," SSE/EFI Working Paper Series in Economics and Finance 468, Stockholm School of Economics, revised 01 Jan 2007.
  17. Kenneth A. Froot & Paul Klemperer, 1988. "Exchange Rate Pass-Through When Market Share Matters," NBER Working Papers 2542, National Bureau of Economic Research, Inc.
  18. Salvador Gil-Pareja, 2000. "Exchange rates and European countries’ export prices: An empirical test for asymmetries in pricing to market behavior," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(1), pages 1-23, March.
  19. Adolfson, Malin, 1999. "Swedish Export Price Determination: Pricing to Market Shares?," SSE/EFI Working Paper Series in Economics and Finance 306, Stockholm School of Economics.
  20. Paul R. Bergin & Reuven Glick, 2005. "Tradability, productivity, and understanding international economic integration," Working Paper Series 2005-13, Federal Reserve Bank of San Francisco.
  21. Roberto Basile & Sergio de Nardis & Alessandro Girardi, 2006. "Pricing to market of Italian exporting firms," ISAE Working Papers 70, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
  22. Sven W. Arndt & J. David Richardson, 1987. "Real-Financial Linkages Among Open Economies," NBER Working Papers 2230, National Bureau of Economic Research, Inc.
  23. Knetter, Michael M, 1993. "International Comparisons of Price-to-Market Behavior," American Economic Review, American Economic Association, vol. 83(3), pages 473-86, June.
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