1. Pricing-to-Market and Exchange Rate Pass-Through in the U.S. Broiler Meat Export Markets.
- Author
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Sung C. No, Davis, Christopher G., and Harvey, David
- Subjects
EXCHANGE rate pass-through ,BROILER chickens ,POULTRY industry ,INTERNATIONAL trade - Abstract
The conventional estimation method of the pricing-to-market (the PTM) model in the international trade literature is a within model of panel regression of export prices on exchange rates with time and country dummies. Previous studies have found a significant coefficient parameter in exchange rate variable, which is only indicative of short-run pricing-to-market for multiple export destinations rather than long-run pricing behavior. This paper examines a long- run pricing-to-market for U.S. broiler meat export markets, using "between" panel specification. Findings indicate that the U.S. pricing-to-market behavior of exporters is both transient and persistently long. These results clearly imply that the implementation of a long-run pricing-to-market strategy in the U.S. broiler meat exports mitigates the rising imbalance between the domestic production and consumption via incomplete exchange rate pass-through. [ABSTRACT FROM AUTHOR]
- Published
- 2015