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International Competitiveness and Industry Pricing in Canadian Manufacturing

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  • John A. Karikari

Abstract

This paper examines the effect of the international competitiveness of home producers on their pricing. Evidence based on the 1970-75 period supports the claim that in the Canadian manufacturing sector domestic prices are set in accordance with a mixture of two pricing hypotheses: the "Eastman-Stykolt pricing hypothesis" (ESPH) and the "monopolistic pricing hypothesis" (MPH). However, in the 1975-80 period when their competitiveness increased, prices were set solely according to the MPH. For the purposes of assessing the impact of free trade, this paper shows the circumstances under which each or a mixture of these pricing hypotheses employed in the Harris-Cox model on the gains from freer trade would be appropriate.

Suggested Citation

  • John A. Karikari, 1988. "International Competitiveness and Industry Pricing in Canadian Manufacturing," Canadian Journal of Economics, Canadian Economics Association, vol. 21(2), pages 410-426, May.
  • Handle: RePEc:cje:issued:v:21:y:1988:i:2:p:410-26
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    Cited by:

    1. John R. Baldwin & Beiling Yan, 2007. "Exchange Rate Cycles and Canada/US Manufacturing Prices," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(3), pages 508-533, October.
    2. Baldwin, John R. Yan, Beiling, 2006. "Influences intérieures et étrangères sur les prix canadiens selon les mouvements cycliques du taux de change, 1974 à 1996," Série de documents de recherche sur l'analyse économique (AE) 2006043f, Statistics Canada, Direction des études analytiques.
    3. Harry Bloch & Michael Olive, 1999. "Cyclical and Competitive Influences on Pricing in Australian Manufacturing," The Economic Record, The Economic Society of Australia, vol. 75(3), pages 268-279, September.
    4. Baldwin, John R. Yan, Beiling, 2006. "Domestic and Foreign Influences on Canadian Prices over Exchange Rate Cycles, 1974 to 1996," Economic Analysis (EA) Research Paper Series 2006043e, Statistics Canada, Analytical Studies Branch.
    5. Hazledine, Tim, 1989. "Industrial Organisation Foundations Of Trade Policy Modelling," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 33(1), pages 1-19, April.
    6. Baldwin, John R. Yan, Beiling, 2006. "Les mouvements cycliques du taux de change et les prix dans les secteurs canadien et américain de la fabrication," Série de documents de recherche sur l'analyse économique (AE) 2006041f, Statistics Canada, Direction des études analytiques.

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