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Who Prices Locally? Survey Evidence of Swiss Exporters

Author

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  • Andreas M. Fischer
  • Prof. Dr. Matthias Lutz
  • Dr. Manuel Wälti

Abstract

Survey information on Swiss exporters is used to test the hypothesis that firm-specific factors, in particular firm size, are important determinants of pricing-to-market (PTM). The survey asked exporters whether they set dif- ferent prices across markets and, if so, whether price segmentation occurred because of pricing conditions in the local market or other factors. The empirical analysis is based on a probit model that regresses a binary-choice variable of PTM on firm size and other control variables. The main empirical finding is that firm size and PTM are positively and significantly correlated. A further result is that while firms whose main export market is in the Euro area are less likely to engage in PTM, firm size plays a bigger role for them. These results are robust across different PTM classifications, regression specifications, export destinations, and industrial sectors.

Suggested Citation

  • Andreas M. Fischer & Prof. Dr. Matthias Lutz & Dr. Manuel Wälti, 2007. "Who Prices Locally? Survey Evidence of Swiss Exporters," Working Papers 2007-16, Swiss National Bank.
    • Handle: RePEc:snb:snbwpa:2007-16
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Barthélémy Bonadio & Andreas M Fischer & Philip Sauré, 2020. "The Speed of Exchange Rate Pass-Through," Journal of the European Economic Association, European Economic Association, vol. 18(1), pages 506-538.
    2. Ligthart, Jenny E. & Werner, Sebastian E.V., 2012. "Has the euro affected the choice of invoicing currency?," Journal of International Money and Finance, Elsevier, vol. 31(6), pages 1551-1573.
    3. Daniel Kaufmann, 2009. "Price-Setting Behaviour in Switzerland: Evidence from CPI Micro Data," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 145(III), pages 293-349, September.
    4. Narkevich, Siarhei & Trunin, Pavel, 2013. "Prospects for the Russian Ruble as a Regional Reserve Currency," Published Papers dok2, Russian Presidential Academy of National Economy and Public Administration.
    5. Sergey Narkevich & Pavel Trunin, 2012. "Reserve Currencies: Factors of Evolution and their Role in the World Economy," Research Paper Series, Gaidar Institute for Economic Policy, issue 162P.
    6. Andrea Lassmann, 2013. "Exchange Rate Transmission and Export Activity at the Firm Level," KOF Working papers 13-331, KOF Swiss Economic Institute, ETH Zurich.

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    More about this item

    Keywords

    Pricing to markets; local currency pricing; firm size;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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