Virtual borders

• 成果类型: Article
• 署名作者: Boivin, Jean; Clark, Robert; Vincent, Nicolas
• 署名单位: Universite de Montreal; HEC Montreal
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2011.10.004
• 发表日期: 2012
• 页码: 327-335
• 关键词: law of one price; Border effects; market segmentation; price rigidity

摘要

Numerous studies have documented substantial deviations from the law of one price for consumer goods. However, in most cases small transaction costs can explain these violations. In our study, we purposely focus on a market where such frictions are minimal, namely online bookselling in the US and Canada. We exploit the high frequency nature of the data to disentangle nominal rigidities from market segmentation and show that while firms seem to respond to domestic competitive pressure, there is no evidence that they react to fluctuations in the relative price of foreign competition following exchange rate mavements. In addition, we cannot identify any significant impact on sales volume stemming from variations in international relative prices. Hence, our results suggest that even in an environment with minimal frictions, international market segmentation is extensive and responsible for violations of the law of one price. (C) 2011 Elsevier B.V. All rights reserved.