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Market Shares, Financial Constraints and Pricing Behaviour in the Export Market
Author(s) -
Gottfries Nils
Publication year - 2002
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/1468-0335.00302
Subject(s) - economics , parameterized complexity , mark to model , monetary economics , market price , market share , market depth , financial market , financial economics , econometrics , microeconomics , finance , paleontology , mathematics , horse , combinatorics , stock market , biology
A structural dynamic model of price and quantity adjustment is estimated on time series data for exports and export prices. Two sources of dynamics are considered: customer markets and preset prices. As predicted by the customer market model, the market share adjusts slowly after a change in the relative price and financial conditions affect prices. Prices are found to be sticky in the sense that they do not reflect the most recent information about costs and exchange rates. A parsimoniously parameterized structural model explains about 90% of the variation in market share and the relative price.