Market Shares, Financial Constraints, and Pricing Behavior in the Export Market
Uppsala University Working Paper No.15
32 Pages Posted: 8 Dec 1999
There are 2 versions of this paper
Market Shares, Financial Constraints, and Pricing Behavior in the Export Market
Date Written: September 1999
Abstract
A parsimonious structural model of price and quantity dynamics is applied to Swedish exports and export prices for manufactured goods 1972-1996. Two sources of dynamics are considered: customer markets and pre-set prices. The dynamic adjustment of exports is very much in line with what the customer market model predicts: the market share adjusts slowly after a change in the relative price. Prices are sticky in the sense that they do not reflect the most recent information about costs and exchange rates. Prices are high when firms are borrowing heavily, supporting the argument in Gottfries (1991) that financial constraints affect pricing behavior.
JEL Classification: D43, E31, F12, F41
Suggested Citation: Suggested Citation
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