IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/1486.html
   My bibliography  Save this paper

Petrol and Crude Oil Prices: Asymmetric Price Transmission

Author

Listed:
  • Wlazlowski, Szymon

Abstract

This paper examines the relationship between crude oil prices, the dollar-pound exchange rate and petrol prices in the UK over the period 1982-2001. Quantitative methods were used to examine the existence of the long-run equilibrium and test for the presence of asymmetric patterns in the short-run responses to upstream price changes. Also the degree of asymmetry in the adjustment towards long-run equilibrium was analysed. Results confirm that short-run response is greater for increases in upstream prices and that the long-run equilibrium is reached faster after increase in upstream prices. Thus the opinion held by drivers in the UK is confirmed. Detailed analysis confirmed close relationship between the asymmetry and the size and change in the market margin.

Suggested Citation

  • Wlazlowski, Szymon, 2001. "Petrol and Crude Oil Prices: Asymmetric Price Transmission," MPRA Paper 1486, University Library of Munich, Germany, revised 2001.
  • Handle: RePEc:pra:mprapa:1486
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/1486/1/MPRA_paper_1486.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Louis T. Wells, 1983. "Third World Multinationals: The Rise of Foreign Investments from Developing Countries," MIT Press Books, The MIT Press, edition 1, volume 1, number 026273169x, January.
    2. Liu, Hong & Li, Kequan, 2002. "Strategic Implications of Emerging Chinese Multinationals:: The Haier Case Study," European Management Journal, Elsevier, vol. 20(6), pages 699-706, December.
    3. Peter Nolan & Dylan Sutherland & Jin Zhang, 2002. "The Challenge of the Global Business Revolution," Contributions to Political Economy, Oxford University Press, vol. 21(1), pages 91-110, December.
    4. Timothy J. Sturgeon, 2002. "Modular production networks: a new American model of industrial organization," Industrial and Corporate Change, Oxford University Press, vol. 11(3), pages 451-496, June.
    5. Chadwick, Simon & Thwaites, Des, 2005. "Managing Sport Sponsorship Programs: Lessons from a Critical Assessment of English Soccer," Journal of Advertising Research, Cambridge University Press, vol. 45(03), pages 328-338, September.
    6. Peter J Buckley & Pervez N Ghauri, 2004. "Globalisation, economic geography and the strategy of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(3), pages 255-255, May.
    7. Peter J Buckley, 2002. "Is the International Business Research Agenda Running Out of Steam?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(2), pages 365-373, June.
    8. John Child & Suzana B. Rodrigues, 2005. "The Internationalization of Chinese Firms: A Case for Theoretical Extension?," Management and Organization Review, International Association of Chinese Management Research, vol. 1(3), pages 381-410, November.
    9. Paba, Sergio, 1986. "'Brand-naming' as an Entry Strategy in the White Goods Industry," Cambridge Journal of Economics, Oxford University Press, vol. 10(4), pages 305-318, December.
    10. Peter J Buckley & Pervez N Ghauri, 2004. "Globalisation, economic geography and the strategy of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(2), pages 81-98, March.
    11. Liu, Xiaohui & Buck, Trevor & Shu, Chang, 2005. "Chinese economic development, the next stage: outward FDI?," International Business Review, Elsevier, vol. 14(1), pages 97-115, February.
    12. John H Dunning, 1995. "Reappraising the Eclectic Paradigm in an Age of Alliance Capitalism," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(3), pages 461-491, September.
    13. Mathews, John A., 2002. "Dragon Multinational: A New Model for Global Growth," OUP Catalogue, Oxford University Press, number 9780195121469.
    14. John H Dunning, 1988. "The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(1), pages 1-31, March.
    15. Sobrero, Maurizio & Roberts, Edward B., 2002. "Strategic management of supplier-manufacturer relations in new product development," Research Policy, Elsevier, vol. 31(1), pages 159-182, January.
    16. Deng, Ping, 2004. "Outward investment by Chinese MNCs: Motivations and implications," Business Horizons, Elsevier, vol. 47(3), pages 8-16.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Papusson Chaiwat & Nantarat Tangvitoontham, 2014. "Petroleum’s Price Transmission and Imported Demand for Crude Oil in Thailand," International Journal of Energy Economics and Policy, Econjournals, vol. 4(3), pages 476-483.
    2. Ma. Joy Abrenica & Rolando Danao & Ma. Nimfa Mendoza, 2014. "Market competition in the downstream oil industry: is there evidence of price asymmetry?," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 51(2), pages 1-20, December.
    3. Pratap Kumar JENA, 2016. "Commodity market integration and price transmission: Empirical evidence from India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 283-306, Autumn.
    4. Katarzyna Leszkiewicz-Kędzior & Aleksander Welfe, 2014. "Asymmetric Price Adjustments in the Fuel Market," Central European Journal of Economic Modelling and Econometrics, CEJEME, vol. 6(2), pages 105-127, June.
    5. Pratap Kumar JENA, 2016. "Commodity market integration and price transmission: Empirical evidence from India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 283-306, Autumn.
    6. Jordi Perdiguero-García, 2010. "“Symmetric or asymmetric gasoline prices? A metaanalysis approach”," IREA Working Papers 201013, University of Barcelona, Research Institute of Applied Economics, revised Nov 2010.
    7. Alexeeva-Talebi, Victoria, 2011. "Cost pass-through of the EU emissions allowances: Examining the European petroleum markets," Energy Economics, Elsevier, vol. 33(S1), pages 75-83.
    8. Angelopoulou, Eleni & Gibson, Heather D., 2010. "The determinants of retail petrol prices in Greece," Economic Modelling, Elsevier, vol. 27(6), pages 1537-1542, November.
    9. Szymon Wlazlowski & Monica Giulietti & Jane Binner & Costas Milas, 2008. "Smooth Transition Models in Price Transmission," Working Paper series 04_08, Rimini Centre for Economic Analysis.

    More about this item

    Keywords

    Asymmetric Price Transmission; rockets and feathers; nonlinearity; price tranmission;

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:1486. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.