Firms' heterogeneity, incomplete information, and pass-through

• 成果类型: Article
• 署名作者: Garetto, Stefania
• 署名单位: Boston University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2016.05.001
• 发表日期: 2016
• 页码: 168-179
• 关键词: Heterogeneous firms; incomplete information; Incomplete pass-through

摘要

A large body of empirical work documents that prices of traded goods change by a smaller proportion than real exchange rates between the trading countries (incomplete pass-through). I present a Ricardian model of trade and international price-setting with heterogeneous firms, Bertrand competition and incomplete information. The model implies that: 1) firm-level pass-through is incomplete and a U-shaped function of firm-level productivity and market share; and 2) controlling for firm market share, producers operating under incomplete information, like for example new entrants in a market, exhibit lower pass-through rates than producers operating under complete information. Estimates from a panel data set of cars prices support the predictions of the model. (C) 2016 Elsevier B.V. All rights reserved.