Discussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank 2006,37
The question as to whether the globalisation-related increase in competitive pressure may have caused the importance of exchange rate pass-through and pricing-to-market for export pricing in Germany to shift since the 1990s is addressed by testing the long-run export pricing behaviour of German enterprises for changes in the impact of its determinants. As globalisation may have affected competitive pressure in individual product markets differently, export pricing is analysed for 11 product categories. Analytically, this problem is solved by applying the Saikkonen (1991) approach to estimate the individual export price categories in single equations. Moreover, error correction models are used to test exporters' short-run price-setting behaviour for asymmetry, ie whether short-run increases in the export price determinants are passed through to a different extent than decreases.