SSE/EFI Working Paper Series in Economics and Finance
Swedish Export Price Determination: Pricing to Market Shares?
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. However, the pricing behaviour does
not seem to be determined by the development of market shares, in any cases
except one. 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 -16
% and +109 %.
Keywords: Cointegration; exchange rates; export prices; market shares; pass-through; pricing to market; (follow links to similar papers)
JEL-Codes: E30; F31; F41; (follow links to similar papers)
51 pages, February 26, 1999
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