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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: 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: 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, Revised 2014-01
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Citations: View citations in EconPapers (5) Track citations by RSS feed

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ftp://mse.univ-paris1.fr/pub/mse/CES2013/13057R.pdf (application/pdf)

Related works:
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 (2013) Downloads
Working Paper: Export price adjustments under financial constraints (2013)
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