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

  • Sarah Guillou

    (OFCE)

  • Stefano Schiavo

    (OFCE)

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://spire.sciencespo.fr/hdl:/2441/6123/resources/wp2007-25.pdf
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Paper provided by Sciences Po in its series Sciences Po publications with number 2007-25.

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Date of creation: Sep 2007
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Handle: RePEc:spo:wpmain:info:hdl:2441/6123
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  1. Feenstra, R.C. & Gagnon, J.E. & Knetter, M.M., 1993. "Market Share and Exchange Rate Pass-Through in World Automobile Trade," Papers 93-14, California Davis - Institute of Governmental Affairs.
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  4. Asplund, Björn Marcus & Eriksson, Rickard & Strand, Niklas, 2002. "Price Discrimination in Oligopoly: Evidence from Swedish Newspapers," CEPR Discussion Papers 3269, C.E.P.R. Discussion Papers.
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  7. 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.
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  11. Guillaume Gaulier & Amina Lahrèche-Révil & Isabelle Méjean, 2008. "Exchange-rate pass-through at the product level," Canadian Journal of Economics, Canadian Economics Association, vol. 41(2), pages 425-449, May.
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  15. 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.
  16. 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.
  17. Knetter, Michael M, 1993. "International Comparisons of Price-to-Market Behavior," American Economic Review, American Economic Association, vol. 83(3), pages 473-86, June.
  18. 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.
  19. Kenneth A. Froot & Paul Klemperer, 1989. "Exchange Rate Pass-Through When Market Share Matters," NBER Working Papers 2542, National Bureau of Economic Research, Inc.
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  21. 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, vol. 136(1), pages 1-23, March.
  22. André Sapir, 2005. "Un modello obsoleto? Crescita e specializzone dell'economia italiana," ULB Institutional Repository 2013/8122, ULB -- Universite Libre de Bruxelles.
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