Working Paper Series,
Uppsala University, Department of Economics

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.

Keywords: exports; market share; customer; export price; price setting; markup; sticky price; financial constraints

JEL-codes: D43; E31; F12; F41

32 pages, September 10, 1999

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Nils Gottfries, (2002), 'Markets Shares, Financial Constraints, and Pricing Behavior in the Export Market', Economica, vol 69, pages 583-607

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