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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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  17. Saeid Mahdavi, 2002. "The response of the US export prices to changes in the dollar's effective exchange rate: further evidence from industry level data," Applied Economics, Taylor & Francis Journals, vol. 34(17), pages 2115-2125.
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  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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