PRICING TO MARKET OF ITALIAN EXPORTING FIRMS

Roberto Basile (1) , Sergio de Nardis (1) , Alessandro Girardi (2, 3)

1 Institute for Studies and Economic Analyses, ISAE
2 Economics and Institutions
3 Institute for Studies and Economic Analyses, ISAE

This paper investigates the pricing-to-market (PTM) behaviour of Italian exporting firms, using quarterly survey data by sector and by region over the period 1999q1-2005q2. A partial equilibrium imperfect competition model provides the structure according to which the orthogonality of structural shocks is derived. Impulse-response analysis shows non-negligible reactions of export-domestic price margins to unanticipated changes in cost competitiveness and in foreign and domestic demand levels, even though these effects appear to be of a transitory nature. For the period 1999-2001 a typical PTM behaviour emerges, while during the most recent years favourable foreign demand conditions allowed firms to increase their export-domestic price margins in face of a strong deterioration of their cost competitiveness. Macroeconomic implications of the observed PTM behaviour are also discussed.

Mots clés: Social Sciences & Humanities

Roberto Basile, Sergio de Nardis, Alessandro Girardi. PRICING TO MARKET OF ITALIAN EXPORTING FIRMS. Applied Economics, 2009, 41 (12), pp.1543-1562. ⟨10.1080/00036840601032219⟩. ⟨hal-00582110⟩