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

Gottfries, Nils

doi:10.2139/ssrn.193009

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

Uppsala University Working Paper No.15

32 Pages Posted: 8 Dec 1999

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

There are 2 versions of this paper

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

Gottfries, Nils, Market Shares, Financial Constraints, and Pricing Behavior in the Export Market (September 1999). Uppsala University Working Paper No.15, Available at SSRN: https://ssrn.com/abstract=193009 or http://dx.doi.org/10.2139/ssrn.193009