IS EXPORT PRICE ADJUSTMENT ASYMMETRIC - EVALUATING THE MARKET SHARE AND MARKETING BOTTLENECKS HYPOTHESES

Export price adjustment is asymmetric with respect to currency fluctua tions in at least two circumstances. If firms face capacity constraint s in distribution networks or quantitative trade restrictions, then pr icing-to-market may be greater during depreciations of the exporter's currency. If firms attempt to build market share subject to the threat of trade restrictions, then pricing-to-market may be greater during a ppreciations of the exporter's currency. This paper tests for asymmetr ies using panel data on German and Japanese 7-digit industry exports. The data seldom reject the hypothesis of a symmetric response of price s to exchange rates. (JEL F14, F30, L60).