Prices, Margins and Liquidity Constraints: Swedish Newspapers 1990-1996

Marcus Asplund, Rickard Eriksson and Niklas Strand
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Niklas Strand: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden

No 470, Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: For Swedish newspaper firms, a market with high switching costs, the subscription market, and a market with low switching costs, the advertising market, are of approximately equal importance. When Sweden enters a deep recession, we find that liquidity constraints influence the pricing decision in the former, but not the latter market. This gives support to theories stressing the magnifying effect of liquidity constraints on the business cycle.

Keywords: Liquidity constraints; switching costs; price adjustment; newspaper industry (search for similar items in EconPapers)
JEL-codes: D43 E32 G33 L82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec
Date: 2001-10-29
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Forthcoming in Economica.

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Related works:
Journal Article: Prices, Margins and Liquidity Constraints: Swedish Newspapers, 1990-1992 (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:hhs:hastef:0470

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