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Swedish Export Price Determination: Pricing to Market Shares?

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  • Adolfson, Malin

    (Department of Economics, Stockholm School of Economics)

Abstract

The Swedish export price determination for automobiles and kraft paper to three destination countries, over the period 1980-1994, is investigated. Formal tests on an error correction model indicate results consistent with price discrimination in Swedish exports of both goods. The exporters use their market power for pricing to market, which is characterized by the concern for foreign conditions, and implies an incomplete exchange rate pass-through. The pricing behaviour seems to be determined by the development of market shares, in about half of the cases. The total pass-through to the local currency price within a year, that is the effect of an exchange rate change working through all variables and all interactions in the price determination, span between -85 % and +111 %.

Suggested Citation

  • Adolfson, Malin, 1999. "Swedish Export Price Determination: Pricing to Market Shares?," Working Paper Series 96, Sveriges Riksbank (Central Bank of Sweden).
    • Handle: RePEc:hhs:rbnkwp:0096
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Westlund, Hans & Johansson, Magnus & Molinder, Jonas, 2000. "Exchange Rate Sensitivity Of Swedish Regions," ERSA conference papers ersa00p140, European Regional Science Association.
    2. Brissimis, Sophocles N. & Kosma, Theodora, 2005. "Market power, innovative activity and exchange rate pass-through in the euro area," Working Paper Series 531, European Central Bank.
    3. Sarah Guillou & Stefano Schiavo, 2010. "Export Prices and Increasing World Competition: Evidence from French, German, and Italian Pricing Behaviour," Chapters, in: Jean-Luc Gaffard & Evens Salies (ed.), Innovation, Economic Growth and the Firm, chapter 10, Edward Elgar Publishing.
    4. Adolfson, Malin, 2001. "Export price responses to exogenous exchange rate movements," Economics Letters, Elsevier, vol. 71(1), pages 91-96, April.
    5. Roberto Basile & Sergio de Nardis & Alessandro Girardi, 2009. "Pricing to market of Italian exporting firms," Applied Economics, Taylor & Francis Journals, vol. 41(12), pages 1543-1562.
    6. Brissimis, Sophocles N. & Kosma, Theodora S., 2007. "Market power and exchange rate pass-through," International Review of Economics & Finance, Elsevier, vol. 16(2), pages 202-222.
    7. Sophocles N. Brissimis & Theodora S. Kosma, 2006. "Market Conduct, Price Interdependence and Exchange Rate Pass-Through," Working Papers 51, Bank of Greece.
    8. Jean-Luc Gaffard & Evens Salies (ed.), 2010. "Innovation, Economic Growth and the Firm," Books, Edward Elgar Publishing, number 13101.
    9. repec:hal:wpspec:info:hdl:2441/6123 is not listed on IDEAS
    10. Sophocles N. Brissimis & Theodora S. Kosma, 2005. "Market Power, Innovative Activity and Exchange Rate Pass-Through," Working Papers 22, Bank of Greece.
    11. repec:hal:spmain:info:hdl:2441/6123 is not listed on IDEAS
    12. repec:spo:wpmain:info:hdl:2441/6123 is not listed on IDEAS
    13. Tantirigama, Mangalika & Lee, Minsoo & Sanyal, Amal, 2008. "New Zealand's Pastoral Exports: Can Small Countries Practise Pricing-to-Market?," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 4(1-2), pages 1-15.
    14. repec:spo:wpecon:info:hdl:2441/6123 is not listed on IDEAS

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    More about this item

    Keywords

    Cointegration; Exchange rates; Export prices; Market shares; Pass-through; Pricing to market;
    All these keywords.

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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