IDEAS home Printed from https://ideas.repec.org/a/ags/ifaamr/207003.html
   My bibliography  Save this article

Pricing-to-Market and Exchange Rate Pass-Through in the U.S. Broiler Meat Export Markets

Author

Listed:
  • No, Sung C.
  • Davis, Christopher G.
  • Harvey, David

Abstract

The conventional estimation method of the pricing-to-market (the PTM) model in the international trade literature is a within model of panel regression of export prices on exchange rates with time and country dummies. Previous studies have found a significant coefficient parameter in exchange rate variable, which is only indicative of short-run pricing-to-market for multiple export destinations rather than long-run pricing behavior. This paper examines a long-run pricing-to-market for U.S. broiler meat export markets, using “between” panel specification. Findings indicate that the U.S. pricing-to-market behavior of exporters is both transient and persistently long. These results clearly imply that the implementation of a long-run pricing-to-market strategy in the U.S. broiler meat exports mitigates the rising imbalance between the domestic production and consumption via incomplete exchange rate pass-through.

Suggested Citation

  • No, Sung C. & Davis, Christopher G. & Harvey, David, 2015. "Pricing-to-Market and Exchange Rate Pass-Through in the U.S. Broiler Meat Export Markets," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(A), pages 1-12, July.
    • Handle: RePEc:ags:ifaamr:207003
    DOI: 10.22004/ag.econ.207003
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/207003/files/201401426.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.207003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Knetter, Michael M, 1989. "Price Discrimination by U.S. and German Exporters," American Economic Review, American Economic Association, vol. 79(1), pages 198-210, March.
    2. Huan Zhao & Xiaodong Du & David Hennessy, 2011. "Pass-through in United States beef cattle prices: a test of Ricardian rent theory," Empirical Economics, Springer, vol. 40(2), pages 497-508, April.
    3. Daniel H. Pick & Timothy A. Park, 1991. "The Competitive Structure of U.S. Agricultural Exports," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(1), pages 133-141.
    4. Davis, Christopher G. & Karemera, David & Muhammad, Andrew & Wilson, Norbert L.W. & Brooks, Nora L. & Harvey, David J., 2011. "Has Exchange Rate Volatility Affected Broiler Trade Flows?," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103807, Agricultural and Applied Economics Association.
    5. Dornbusch, Rudiger, 1987. "Exchange Rates and Prices," American Economic Review, American Economic Association, vol. 77(1), pages 93-106, March.
    6. Dragan Miljkovic & Gary Brester & John Marsh, 2003. "Exchange rate pass-through, price discrimination, and US meat export prices," Applied Economics, Taylor & Francis Journals, vol. 35(6), pages 641-650.
    7. Sven W. Arndt & J. David Richardson, 1987. "Real-Financial Linkages Among Open Economies," NBER Working Papers 2230, National Bureau of Economic Research, Inc.
    8. Chernenko, Sergey & Faulkender, Michael, 2011. "The Two Sides of Derivatives Usage: Hedging and Speculating with Interest Rate Swaps," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 46(6), pages 1727-1754, December.
    9. repec:cup:jfinqa:v:46:y:2011:i:06:p:1727-1754_00 is not listed on IDEAS
    10. Fisher, Franklin M & McGowan, John J, 1983. "On the Misuse of Accounting Rates of Return to Infer Monopoly Profits," American Economic Review, American Economic Association, vol. 73(1), pages 82-97, March.
    11. Griffith, Garry R. & Mullen, John D., 2001. "Pricing-to-market in NSW rice export markets," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(3), pages 1-12.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Risti Permani, 2021. "FTA, Exchange rate pass‐through and export price behavior – Lessons from the Australian dairy sector," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(1), pages 192-221, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Falk & Rahel Falk, 2000. "Pricing to Market of German Exporters: Evidence from Panel Data," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 27(1), pages 21-46, March.
    2. Gafarova, Gulmira & Perekhozhuk, Oleksandr & Glauben, Thomas, 2015. "Price Discrimination And Pricing-To-Market Behavior Of Black Sea Region Wheat Exporters," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 47(3), pages 287-316, August.
    3. Dragan Miljkovic & Gary Brester & John Marsh, 2003. "Exchange rate pass-through, price discrimination, and US meat export prices," Applied Economics, Taylor & Francis Journals, vol. 35(6), pages 641-650.
    4. Robyn Swift, 2004. "The pass‐through of exchange rate changes to the prices of Australian exports of dairy and livestock products," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(1), pages 159-185, March.
    5. Bong-Tae Kim, 2018. "Pricing Behavior for Sustainably Farmed Fish in International Trade: The Case of Norwegian Atlantic Salmon ( Salmo salar )," Sustainability, MDPI, vol. 10(12), pages 1-14, December.
    6. Sarah Guillou, 2008. "Exports and exchange rate : a firm-level investigation," Working Papers hal-00973044, HAL.
    7. Michael M. Knetter, 1992. "Exchange Rates and Corporate Pricing Strategies," NBER Working Papers 4151, National Bureau of Economic Research, Inc.
    8. Richard Fabling & Lynda Sanderson, 2015. "Export Performance, Invoice Currency and Heterogeneous Exchange Rate Pass-through," The World Economy, Wiley Blackwell, vol. 38(2), pages 315-339, February.
    9. Lapham, Beverly J., 1995. "A dynamic general equilibrium analysis of deviations from the laws of one price," Journal of Economic Dynamics and Control, Elsevier, vol. 19(8), pages 1355-1389, November.
    10. Andrew Atkeson & Ariel Burstein, 2008. "Pricing-to-Market, Trade Costs, and International Relative Prices," American Economic Review, American Economic Association, vol. 98(5), pages 1998-2031, December.
    11. Carew, Richard, 2000. "Pricing To Market Behavior: Evidence From Selected Canadian And U.S. Agri-Food Exports," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-18, December.
    12. Saghaian, Sayed H. & Reed, Michael R., 2004. "Integrating Marginal Cost into Pricing-to-market Models for U.S. Agricultural Products," CAFRI: Current Agriculture, Food and Resource Issues, Canadian Agricultural Economics Society, issue 5, pages 1-17, July.
    13. Goldberg, Pinelopi Koujianou & Knetter, Michael M., 1999. "Measuring the intensity of competition in export markets," Journal of International Economics, Elsevier, vol. 47(1), pages 27-60, February.
    14. A. Auer, Raphael & Chaney, Thomas & Sauré, Philip, 2018. "Quality pricing-to-market," Journal of International Economics, Elsevier, vol. 110(C), pages 87-102.
    15. Paul R. Bergin & Robert C. Feenstra, 2017. "Pricing-to-Market, Staggered Contracts, and Real Exchange Rate Persistence," World Scientific Book Chapters, in: International Macroeconomic Interdependence, chapter 6, pages 155-185, World Scientific Publishing Co. Pte. Ltd..
    16. Giancarlo Corsetti & Paolo Pesenti, 2009. "The Simple Geometry of Transmission and Stabilization in Closed and Open Economies," NBER Chapters, in: NBER International Seminar on Macroeconomics 2007, pages 65-116, National Bureau of Economic Research, Inc.
    17. repec:hal:spmain:info:hdl:2441/6151 is not listed on IDEAS
    18. Rebecca Hellerstein, 2005. "A Decomposition of the Sources of Incomplete Cross-Border Transmission," 2005 Meeting Papers 805, Society for Economic Dynamics.
    19. Jacint Balaguer & Vicente Orts & Ezequiel Uriel, 1997. "Segmentación de mercados y discriminación internacional de precios. Evidencia empírica para las exportaciones industriales españolas a los principales países de la OCDE," Investigaciones Economicas, Fundación SEPI, vol. 21(3), pages 543-562, September.
    20. Griffith, Garry R. & Mullen, John D., 2001. "Pricing-to-market in NSW rice export markets," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(3), pages 1-12.
    21. Jeffrey Frankel & David Parsley & Shang-Jin Wei, 2012. "Slow Pass-through Around the World: A New Import for Developing Countries?," Open Economies Review, Springer, vol. 23(2), pages 213-251, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ifaamr:207003. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ifamaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.