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Cyclical and Competitive Influences on Pricing in Australian Manufacturing
Author(s) -
BLOCH HARRY,
OLIVE MICHAEL
Publication year - 1999
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1999.tb02455.x
Subject(s) - competition (biology) , economics , manufacturing , panel data , econometrics , industrial organization , monetary economics , international economics , business , ecology , marketing , biology
Dynamic pricing equations are estimated using an error correction model, with data on a panel of 89 Australian manufacturing industries for the 14 years, 1971172 through 1984/85. The overall pattern is consistent with prices approximately following a fixed mark‐up rule in low concentration industries, while the mark‐up factor in high concentration industries is strongly pro‐cyclical. Also, in high concentration industries that are heavily exposed to import competition, the mark‐up factor increases with prices of foreign competing products and with the general price level for domestic manufactures.