Pricing in International Markets: a 'Small-Country' Benchmark

Abstract

This study examines export pricing to market (PTM) in a ‘small-country’ context using a panel of disaggregated exports from Hong Kong since 1992. Conventional wisdom is that PTM is commonplace – except for U.S. exports. This study provides a benchmark by which to interpret the puzzling behavior of U.S. export prices. Empirically, Hong Kong’s export price behavior is comparable to that from the U.S. This similarity reinforces the idea that PTM behavior is also a function of home market conditions and the ability to price discriminate across markets. There is little evidence of differences in PTM across Hong Kong’s export destinations.pricing to market, small-country