| |
N° 2009-03 |
  |
| March 2009 |
| Price Convergence in the European Union: Within Firms or Composition of Firms? |
Isabelle Méjean
Cyrille Schwellnus |
|
| In this paper we use data on French export prices at the disaggregated firm and product level to evaluate
the effect of economic integration on price convergence. We use the European integration ‘experiment’ and firm-level data on export prices to distinguish between two possible margins of adjustment: At the
intensive margin economic integration induces different pricing strategies within the firm, whereas at the
extensive margin it affects the composition of firms with different pricing strategies. In our sample price
convergence is 40 percent faster in the European Union than in an appropriately defined control group.
30 percent of this effect can be attributed to the fact that a higher share of firms with a low propensity to
price discriminate serve European markets. |
Non-technical summary  |
|
Résumé
non-technique
en français |
|
| Full text |
| |
|
| Price convergence; firms heterogeneity; european integration |
Keywords |
| F12; F33; F40 |
JEL classification |
| |
|
| To visualise the full text document, use Acrobat
Reader |
|
| Contact: |
|
| |
|
|
|
|
