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Markups and export-pricing strategies

Gullstrand, Joakim LU ; Olofsdotter, Karin LU and Thede, Susanna LU (2014) In Review of World Economics 150(2). p.221-239
Abstract (Swedish)
Abstract in Undetermined

We analyze empirically export-price strategies across export destinations using detailed firm-product data. Most recent studies using disaggregated data to investigate why firms charge different prices for the same product on different markets focus on the cost component of prices and neglect the markup component. In this paper, we concentrate on the markup component and examine how variations in firms' export prices may reflect price discrimination by comparing the markup of firms with different pricing strategies. We make use of detailed firm-level data for exporting firms in the Swedish food sector consisting of both manufacturing and intermediary trading firms. The paper documents the... (More)
Abstract in Undetermined

We analyze empirically export-price strategies across export destinations using detailed firm-product data. Most recent studies using disaggregated data to investigate why firms charge different prices for the same product on different markets focus on the cost component of prices and neglect the markup component. In this paper, we concentrate on the markup component and examine how variations in firms' export prices may reflect price discrimination by comparing the markup of firms with different pricing strategies. We make use of detailed firm-level data for exporting firms in the Swedish food sector consisting of both manufacturing and intermediary trading firms. The paper documents the export-price variations within the two sub-sectors and explores how different price strategies correlate with markups. The results offer new information beyond the fact that exporters tend to have a higher markup. In particular, we find that firms in the food-processing sector with a greater ability to discriminate across markets mark their products up even more. This result points to the importance of underlying firm decisions in order to explain differences in export premiums across firms. In addition, the results reveal that markups are a complex function of firm and destination characteristics, and that the relationship between markups and pricing strategies in the manufacturing sector is not necessarily observed in other sectors of the supply chain. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
export prices, price discrimination, markups
in
Review of World Economics
volume
150
issue
2
pages
221 - 239
publisher
Springer
external identifiers
  • wos:000339965800001
  • scopus:84958037296
ISSN
1610-2878
DOI
10.1007/s10290-013-0178-x
language
English
LU publication?
yes
id
ca6b8f23-3bf4-4b46-8fe1-7490bc265710 (old id 3806362)
alternative location
http://link.springer.com/article/10.1007%2Fs10290-013-0178-x
date added to LUP
2013-06-05 08:13:54
date last changed
2017-01-01 06:32:28
@article{ca6b8f23-3bf4-4b46-8fe1-7490bc265710,
  abstract     = {<b>Abstract in Undetermined</b><br/><br>
We analyze empirically export-price strategies across export destinations using detailed firm-product data. Most recent studies using disaggregated data to investigate why firms charge different prices for the same product on different markets focus on the cost component of prices and neglect the markup component. In this paper, we concentrate on the markup component and examine how variations in firms' export prices may reflect price discrimination by comparing the markup of firms with different pricing strategies. We make use of detailed firm-level data for exporting firms in the Swedish food sector consisting of both manufacturing and intermediary trading firms. The paper documents the export-price variations within the two sub-sectors and explores how different price strategies correlate with markups. The results offer new information beyond the fact that exporters tend to have a higher markup. In particular, we find that firms in the food-processing sector with a greater ability to discriminate across markets mark their products up even more. This result points to the importance of underlying firm decisions in order to explain differences in export premiums across firms. In addition, the results reveal that markups are a complex function of firm and destination characteristics, and that the relationship between markups and pricing strategies in the manufacturing sector is not necessarily observed in other sectors of the supply chain.},
  author       = {Gullstrand, Joakim and Olofsdotter, Karin and Thede, Susanna},
  issn         = {1610-2878},
  keyword      = {export prices,price discrimination,markups},
  language     = {eng},
  number       = {2},
  pages        = {221--239},
  publisher    = {Springer},
  series       = {Review of World Economics},
  title        = {Markups and export-pricing strategies},
  url          = {http://dx.doi.org/10.1007/s10290-013-0178-x},
  volume       = {150},
  year         = {2014},
}