Export price adjustments under financial constraints

Secchi, Angelo; Tamagni, Federico; Tomasi, Chiara

Export price adjustments under financial constraints

Angelo Secchi (), Federico Tamagni and Chiara Tomasi ()
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Angelo Secchi: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique
Chiara Tomasi: UNITN - Università degli Studi di Trento = University of Trento

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Abstract: Exploiting data on product-destination level transactions of a large panel of Italian firms, we provide new evidence on the effect of financial constraints on price variation across exporters. Controlling for firm characteristics and endogeneity, constrained exporters charge higher prices than unconstrained firms exporting in the same product-destination market. The positive price difference increases with horizontal differentiation of products, while it reduces in vertically differentiated products, where there is more scope for quality adjustments. The results are consistent with constrained firms exploiting demand rigidities to keep prices up in the attempt to sustain revenues and escape the constraints.

Keywords: horizontal and vertical differentiation; quality adjustment; financial constraints; export prices; contraintes financières; prix à l'exportation; différenciation horizontale et verticale; ajustement de qualité (search for similar items in EconPapers)
Date: 2013-07
New Economics Papers: this item is included in nep-bec and nep-int
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00848159v2
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Citations: View citations in EconPapers (3)

Published in 2013

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00848159

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