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Pricing‐to‐Market: the Japanese Experience with a Falling Yen and the Asian Crisis
Author(s) -
Uctum Merih
Publication year - 2003
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00388
Subject(s) - economics , depreciation (economics) , falling (accident) , monetary economics , profit (economics) , microeconomics , financial capital , capital formation , medicine , environmental health
The paper examines whether Japanese exporters changed their strategic pricing behavior as a result of the profit squeeze of the late 1980s. It shows that shocks such as the end‐of‐bubble, the prolonged yen depreciation, and the Asian crisis affected export prices. These effects, however, are too small to change the long‐run equilibrium relation between sectoral export prices and their determinants. In particular, results suggest that Japanese exporters are not using the depreciation of the yen to gain market share.