Journal article

Publication year: 2017

Pages: 295-328

Journal: Journal of Economics and Statistics

Volume number: 237

Issue number: 4

Open access status: Green

DOI Link: https://doi.org/10.1515/jbnst-2017-0106

Publisher: De Gruyter Brill

Abstract: 

Gravity and pricing to market (PTM) models have been used to elaborate
determinants of bilateral trade and export pricing for different
countries and branches. Typically, only one of the two methods was
chosen. We show in a stepwise approach how a combination of both methods
can reveal novel results on the determinants of exports and export
pricing behaviour. For the case of German beer exports, we show that
structural differences exist between markets on which exporters apply
either PTM or non-PTM strategies. German beer exporters apply PTM
strategies, in particular local-currency stabilization, on those markets
where imports are very sensitive to exchange-rate changes. Non-PTM
strategies, i. e. full exchange-rate transmission, occur on export
markets with insensitive reactions. Apart from PTM strategies, German
beer exports are strongly dependent on policy variables such as the
introduction of the Euro and the partner country’s membership in the EU.

Harvard Citation style: Dreyer, H., Fedoseeva, S. and Herrmann, R. (2017) Gravity Meets Pricing to Market: What a Combined-Method Approach Tells Us on German Beer Exports and Pricing, Journal of Economics and Statistics, 237(4), pp. 295-328. https://doi.org/10.1515/jbnst-2017-0106

APA Citation style: Dreyer, H., Fedoseeva, S., & Herrmann, R. (2017). Gravity Meets Pricing to Market: What a Combined-Method Approach Tells Us on German Beer Exports and Pricing. Journal of Economics and Statistics. 237(4), 295-328. https://doi.org/10.1515/jbnst-2017-0106