Advertisement

Open Economies Review

, Volume 15, Issue 3, pp 261–271 | Cite as

Measuring Pricing to Market in the Eurozone: The Case of the Automobile Industry

  • Jacint Balaguer
  • Vicente Orts
  • José C. Pernías
Article

Abstract

In this paper we measure the pricing to market for the main export products in the Eurozone automobile industry. Results reveal that significant markup adjustments exist following exchange rate variations. In general, these adjustments allow a strong stabilization of prices in buyer's currency terms. Nevertheless, the degree of pricing to market is quite heterogeneous and differs highly across both product categories and destination markets.

automobile industry Eurozone pricing to market 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Balaguer, J., V. Orts, and E. Uriel (1997) “Segmentaci òn de mercados y discriminaci òn internacional de precios. Evidencia empírica para las exportaciones espa ñolas a los principales países de la OCDE.” Investigaciones Econ òmicas 21:543–562.Google Scholar
  2. Bresnahan, T.F. (1989) “Empirical Studies of Industries with Market Power.” In R. Schmalensee and R. Willing (eds.), Handbook of Industrial Organization, vol. 2. Amsterdam: North-Holland.Google Scholar
  3. Dornbusch, R. (1987) “Exchange Rates and Prices.” American Economic Review 77:93–106.Google Scholar
  4. Falk, M. and R. Falk (2000) “Pricing to Market of German Exporters: Evidence from Panel Data.”Empirica27:21–46.Google Scholar
  5. Gagnon, J. and M.M. Knetter (1995) “Markup Adjustment and Exchange Rate Fluctuations: Evidence fromPanel Data on Automobile Exports.” Journal of International Money and Finance 14:289–310.Google Scholar
  6. Gil-Pareja, S. (2001) “Pricing to Market in European Automobile Exports to OECD Countries: A Panel Data Approach.” Applied Economics 33:1845–1856.Google Scholar
  7. Goldberg, P. and M.M. Knetter (1997) “Goods Prices and Exchange Rates: What HaveWe Learned?'' Journal of Economic Literature 35:1243–1272.Google Scholar
  8. Hsiao, C. (1986) Analysis of Panel Data. Cambridge University Press.Google Scholar
  9. Knetter, M.M. (1989) “Price Discrimination by U.S. and German Exporters.” American Economic Review 79:198–210.Google Scholar
  10. —(1993) “International Comparisons of Pricing-to-Market Behavior.” American Economic Review 83:473–486.Google Scholar
  11. Krugman, P.R. (1987) “Pricing to Market when the Exchange Rate Changes.” In S. Arndt and J.D. Richardson (eds.), Real Financial Linkages Among Open Economies. Cambridge: MIT Press.Google Scholar

Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  • Jacint Balaguer
    • 1
  • Vicente Orts
    • 1
  • José C. Pernías
    • 1
  1. 1.Department of Economics and Institute of International EconomicsUniversitat Jaume ICastellónSpain

Personalised recommendations