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Export price adjustments under financial constraints

Angelo Secchi (), Federico Tamagni () and Chiara Tomasi ()

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: By exploring a rich dataset that links international trade transactions to a panel of Italian manufacturing firms, this paper provides new evidence on the role of financial constraints on price variations across exporting firms. After controlling for relevant firm characteristics and potential endogeneity of financial constraints, we find that constrained firms charge higher prices than unconstrained firms exporting in the same product-destination market. The positive price difference increases with the degree of horizontal differentiation of products, while it is smaller for vertically differentiated products, where there is more scope for quality adjustment. Our results are consistent with a scenario where constrained firms exploit demand rigidities to push up their prices to sustain revenues and keep operations going in the attempt to escape the constraints

Keywords: Financial constraints; export prices; horizontal and vertical differentiation; quality adjustment (search for similar items in EconPapers)
JEL-codes: F10 F14 F36 G20 G32 L25 (search for similar items in EconPapers)
Date: 2013-07
New Economics Papers: this item is included in nep-com and nep-int
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Related works:
Journal Article: Export price adjustments under financial constraints (2016) Downloads
Journal Article: Export price adjustments under financial constraints (2016) Downloads
Working Paper: Export price adjustments under financial constraints (2016)
Working Paper: Export price adjustments under financial constraints (2016)
Working Paper: Export price adjustments under financial constraints (2016)
Working Paper: Export price adjustments under financial constraints (2014) Downloads
Working Paper: Export price adjustments under financial constraints (2013) Downloads
Working Paper: Export price adjustments under financial constraints (2013) Downloads
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