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Price Discrimination within and across EMU Markets: Evidence from French Exporters

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  • François Fontaine
  • Julien Martin
  • Isabelle Mejean

Abstract

We study the cross-sectional dispersion of prices paid by EMU importers for French products. We document a significant level of price dispersion both within product categories across exporters, and within exporters across buyers. This latter source of price discrepancies, sellers' price discrimination across buyers, is indicative of deviations from the law-of-one price. Price discrimination (i) is substantial within the EU, within the euro area, and within EMU countries; (ii) has not decreased over the last two decades; (iii) is more prevalent among the largest firms and for more differentiated products; (iv) is lower among retailers and wholesalers; (v) is also observed within almost perfectly homogenous product categories, which suggests that a non-negligible share of price discrimination is triggered by heterogeneous markups rather than quality or composition effects. We then estimate a rich statistical decomposition of the variance of prices to shed light on exporters' pricing strategies.

Suggested Citation

  • François Fontaine & Julien Martin & Isabelle Mejean, 2019. "Price Discrimination within and across EMU Markets: Evidence from French Exporters," NBER Working Papers 26246, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:26246
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    Cited by:

    1. Martin, Julien & Mejean, Isabelle & Parenti, Mathieu, 2020. "Relationship stickiness, international trade, and economic uncertainty," CEPR Discussion Papers 15609, C.E.P.R. Discussion Papers.
    2. Rigo, Davide, 2024. "The role of firm-to-firm relationships in exporter dynamics," LSE Research Online Documents on Economics 121135, London School of Economics and Political Science, LSE Library.
    3. Nagengast, Arne J. & Bursian, Dirk & Menz, Jan-Oliver, 2021. "Dynamic pricing and exchange rate pass-through: Evidence from transaction-level data," European Economic Review, Elsevier, vol. 133(C).
    4. P. M. Picard & A. Tampieri, 2021. "Vertical differentiation and trade among symmetric countries," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(4), pages 1319-1355, June.
    5. Matthieu Crozet & Julian Hinz & Federico Trionfetti, 2023. "Exchange Rate Pass-Around," Working Papers hal-04150476, HAL.
    6. Vanessa Alvariez & Michele Fioretti & Ayumu Ken Kikkawa & Monica Morlacco, 2022. "Two-Sided Market Power in Firm-to-Firm Trade," SciencePo Working papers Main hal-03795736, HAL.
    7. Lota Tamini, 2020. "Comment renforcer les chaînes de valeur bioalimentaires québécoises pour leur meilleure compétitivité sur le marché local et à l’étranger ?," CIRANO Project Reports 2020rp-31, CIRANO.
    8. Hoste, J. & Verboven, F., 2024. "Uncovering the Sources of Cross-border Market Segmentation: Evidence from the EU and the US," Cambridge Working Papers in Economics 2402, Faculty of Economics, University of Cambridge.
    9. Davide Rigo, 2024. "The role of firm‐to‐firm relationships in exporter dynamics," Economica, London School of Economics and Political Science, vol. 91(362), pages 569-587, April.
    10. Liaqat, Zara & Hussain, Karrar & Khan, Bilal M., 2021. "On-the-match price renegotiation: Evidence from Pakistan’s import data," Economics Letters, Elsevier, vol. 202(C).

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    JEL classification:

    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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