Portal de Periódicos da CAPES

Pricing to market at firm level

2004; Springer Science+Business Media; Volume: 140; Issue: 2 Linguagem: Inglês

10.1007/bf02663650

1610-2886

Lourdes Moreno Martín, Diego Rodríguez,

Economic theories and models

This paper analyzes the influence of exchange rate variations on prices in foreign and home markets using firm data. The theoretical benchmark, based on the literature of pricing to market, also takes into account some hypotheses about the effects of demand variations and market power on prices. The empirical analysis for the Spanish economy points out the positive impact of the devaluations of the domestic currency on the relative evolution of prices, though smaller than obtained in previous evidence using aggregated data. The results also suggest a procyclical behavior of prices, which is positively affected by the degree of competition. JEL no. F12, L60, L13