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The market integration process under different regulatory regimes: evidence from the European car sector

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  • Jacint Balaguer Coll

    () (Universitat Jaume I)

Abstract

In this paper we investigate the European car market integration process by analyzing the evolution of cross-country differences in the degree of Pricing-to-Market. The study takes into account the pricing behavior of United Kingdom exporters from 1999m1 to 2009m1. Our preliminary results indicate that international price discrimination is a source of price dispersion within the euro area, and this implies the presence of market segmentation and significant divergences in the market structures perceived by exporter firms. Nevertheless, a dynamic analysis shows that differences in cross-country Pricing-to-Market are significantly unstable and support variations in market structures perceived by exporters. When we include data generated since the Block Exemption Regulation (1400/2002) came fully into force, results support convergence in cross-country pricing behavior. This outcome clearly contrasts with the evidence obtained for some control products and the previous period. These findings are consistent with the fact that the corresponding liberalization of the car distribution system has played an important role in progressing toward market integration. En este trabajo investigamos el proceso de integración del mercado europeo de automóviles analizando la evolución en las divergencias del "Pricing-to-Market" a través de distintos países de destino de las exportaciones. El estudio toma en consideración el comportamiento de precios de los exportares de Reino Unido durante el período 1999m1-2009m1. Los resultados preliminares indican la presencia de discriminación internacional de precios como fuente de dispersión de precios en el área euro, lo que implica la presencia de segmentación de mercados y divergencias significativas en las estructuras de mercado percibidas por las empresas exportadoras. No obstante, el análisis dinámico muestra que las divergencias en el "Pricing-to-Market" son inestables lo que implica variaciones relativas en las estructuras de mercado percibidas por los exportadores. Cuando en el análisis incluimos información estadística a partir de la implantación completa de las Exenciones en Bloque (1400/2002), obtenemos convergencia en el comportamiento de precios a través de los países. Este resultado contrasta claramente con la evidencia obtenida a partir de algunos productos de control y el período anterior. Los resultados son consistentes con que la liberalización del sistema de distribución haya jugado un papel relevante en el proceso de integración del mercado.

Suggested Citation

  • Jacint Balaguer Coll, 2009. "The market integration process under different regulatory regimes: evidence from the European car sector," Working Papers. Serie EC 2009-16, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasec:2009-16
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    File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-2009-16.pdf
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    References listed on IDEAS

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    1. Francisco Requena & Guadalupe Serrano & Joan Martín Montaner, 2009. "The effects of immigration on the productive structure of Spanish regions," Working Papers. Serie EC 2009-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    2. Gil-Pareja, Salvador, 2003. "Pricing to market behaviour in European car markets," European Economic Review, Elsevier, vol. 47(6), pages 945-962, December.
    3. Pilar Beneito López & Amparo Sanchis Llopis & María Engracia Rochina Barrachina, 2009. "The role of learning in innovation: in-house versus externally contracted R&D experience," Working Papers. Serie EC 2009-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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    Cited by:

    1. Ginés Hernández Cánovas & María Camino Ramón Llorens, 2010. "Venture capitalists in Spain: cluster analysis of criteria used in the screening process," Working Papers. Serie EC 2010-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    2. M. Teresa Sanchis Llopis & Vicente Esteve Garcia & Antonio Cubel, 2010. "International technology diffusion through patents during the second half of the XXth century," Working Papers. Serie EC 2010-10, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

    More about this item

    Keywords

    ¿Pricing-to-Market¿; integración de mercado; exportadores de automóviles; cláusulas de localización Pricing-to-Market; market integration; automobile exporters; location clauses.;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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