How linear is pricing-to-market? Empirical assessment of hysteresis and asymmetry of PTM

Svetlana Fedoseeva and Laura M. Werner
Additional contact information
Laura M. Werner: University of Giessen

Empirical Economics, 2016, vol. 50, issue 3, No 17, 1065-1090

Abstract: Abstract Pricing decisions of exporters who are facing imperfect competition in their destination markets might depend on exchange rate changes. While empirical literature often assumes that the impact of the exchange rate on the exporters’ prices is linear and the markup adjustment does not depend on magnitude or direction of the exchange rate change (or allows for short-run asymmetries only), we question this statement and test for the long-run hysteresis and asymmetry of pricing-to-market (PTM). Using the German export beer market as an example, we show that both types of nonlinearities play an important role in PTM decisions.

Keywords: Asymmetry; Beer exports; Hysteresis; NARDL; Pricing-to-market (search for similar items in EconPapers)
JEL-codes: C22 F12 F14 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://link.springer.com/10.1007/s00181-015-0957-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:50:y:2016:i:3:d:10.1007_s00181-015-0957-4

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-015-0957-4

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().