Market Shares, Financial Constraints, and Pricing Behavior in the Export Market

Posted: 16 Jan 2002

See all articles by Nils Gottfries

Nils Gottfries

Uppsala University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

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Abstract

A structural dynamic model of price and quantity adjustment is estimated on time-series data for exports and export prices. Two sources of dynamics are considered: customer markets and pre-set prices. As predicted by the customer market model, the market share adjusts slowly after a change in the relative price and financial conditions affect prices. Prices are found to be sticky in the sense that they do not reflect the most recent information about costs and exchange rates. A parsimonious structural model explains about 90 percent of the variation in market share and the relative price.

Keywords: customer market, switching cost, markup, sticky price, price adjustment

JEL Classification: D43, E31, F41

Suggested Citation

Gottfries, Nils, Market Shares, Financial Constraints, and Pricing Behavior in the Export Market. Available at SSRN: https://ssrn.com/abstract=286035

Nils Gottfries (Contact Author)

Uppsala University - Department of Economics ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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IZA Institute of Labor Economics

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