Degree of Competition and Export-Production Relative Prices when the Exchange Rate Changes: Evidence from a Panel of Czech Exporting Companies

Jiri Podpiera and Marie Raková

Working Papers from Czech National Bank, Research and Statistics Department

Abstract: In this paper we show the relevance of the degree of competition for inferences about changes in export-production relative prices when the nominal exchange rate changes. We devise a model for tradable goods that combines the market competition and the pricing-tomarket literature and we empirically document the contrast between perfectly and imperfectly competitive markets for the export-production relative price responses to exchange rate changes. When the macroeconomic view is taken, a change in the degree of competition in exports (a change in the average mark-up on exported products) alternates the reaction in relative prices and quantity exported and thus requires careful policy-related consideration.

Keywords: Degree of competition; exchange rate; pricing-to-market. (search for similar items in EconPapers)
JEL-codes: C33 D4 F31 F41 (search for similar items in EconPapers)
Date: 2006-12
New Economics Papers: this item is included in nep-com and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:cnb:wpaper:2006/10

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