Pricing behaviour of the New World wine exporters

2019 ◽  
Vol 31 (4) ◽  
pp. 509-531
Author(s):  
Jeremiás Máté Balogh
Keyword(s):  
Exchange Rate ◽  
South African ◽  
Price Discrimination ◽  
New World ◽  
Market Model ◽  
Import Prices ◽  
Pricing To Market ◽  
Content Type ◽  
The Usa ◽  
Exchange Rate Changes

Purpose In recent decades, New World winemakers have increased their wine export to European markets and became considerable market players in the EU. Therefore, this paper aims to explore whether the major New World wine producers are able to exploit its market power at European destination markets. Design/methodology/approach The paper applies the pricing-to-market (PTM) model of trade in respect of asymmetric effect of exchange rate changes by using monthly bilateral wine data between January 2000 and December 2016. Findings First, there is evidence of PTM in three New World wine exporters, namely, Chile, South Africa and the USA. Chile was able to apply price discrimination across Danish, German, Dutch and the British wine markets. Second, South Africa set their prices in Belgian, Dutch and Swedish markets, while the USA discriminated their wine prices in Denmark and Sweden. In contrast, this advantage was not observable in the case of Argentina and Australia. Third, the local-currency price stability was explored in Chilean wine import prices (exported to Belgium, the Czech Republic), South African wine prices (exported to France, Denmark, Germany), in US wine prices (sold in Germany and the UK). Furthermore, the analysis of the asymmetric effects of exchange rate changes suggests that depreciation of the exporter’s currency relative to the Euro had not a significant impact on EU wine import prices. On the whole, the estimated pricing to market model indicates that a non-competitive pricing behaviour of New World exporters was limited and was rather due to the market-specific characteristics. Research limitations/implications The research provides multiple advice for New World wine producers. First, in general, European consumers do not pay an extra price for the New World bottled wines. Second, only Chilean, South African and North American wine exporters can expect higher prices for its wines from European buyers only. Moreover, European wine markets are fairly competitive where New World wine exporters do not have significant market dominance. Therefore, New World wine exporters should strengthen its wine marketing and branding strategy to gain higher market share in Europe and to attract attention to its wines. Finally, exchange rates relative to Euro should be continuously monitored by the New World wine exporters because it might deviate the wine export prices significantly. Originality/value The study applies the pricing-to-market model to major New World wine exporters on the European Union’s destination market. The paper also makes valuable contributions to the wine literature by testing the asymmetric effects of exchange rate changes on wine import prices. It analyses the nature of price discrimination, whether it is market-specific or exchange rate influenced, or both.

Exchange rate pass-through to consumer prices in Ghana: is there asymmetry?

2018 ◽  
Vol 13 (1) ◽  
pp. 162-184 ◽  
Author(s):  
Lordina Amoah ◽  
Meshach Jesse Aziakpono
Keyword(s):  
Exchange Rate ◽  
Policy Action ◽  
Import Prices ◽  
Content Type ◽  
Long Run ◽  
Consumer Prices ◽  
Pass Through ◽  
Exchange Rate Changes ◽  
Exchange Rate Pass Through ◽  
The Impact

Purpose The purpose of this paper is to reexamine the speed and magnitude of exchange rate pass-through (ERPT) to consumer prices in Ghana. Design/methodology/approach The Johansen Maximum Likelihood approach is employed in the estimation of different models of symmetric and asymmetric ERPT. Specifically asymmetric ERPT models with respect to the direction and size of exchange rate changes are estimated. Findings Results reveal that even though a depreciation in the nominal effective exchange rate will lead to an increase of consumer prices in the long-run, it is not statistically significant. Evidence also suggests a significant asymmetry with respect to direction and size of exchange rate changes. This indicates that the right ERPT model is an asymmetric model. Specifically ERPT is found to be incomplete but relatively higher in periods of depreciation than in periods of appreciation; that is 53 percent against 3 percent. ERPT is also higher during episodes of large changes (about 51 percent). Research limitations/implications It would have been interesting to analyze the impact on consumer prices through changes in import prices. That approach was not adopted due to lack of consistent data on import prices in Ghana. Practical implications It is imperative that the monetary authorities critically monitor exchange rate movements in order to be able to take swift policy action so as to counteract any inflationary pressures from the external sector. In particular, much attention should be paid to events and arrangements that could result in large depreciation of the exchange rate. Originality/value While previous studies have assumed a symmetric ERPT model for Ghana, this paper is unique in that it investigates the most appropriate model for examining ERPT in Ghana whether symmetric or an asymmetric.

Thailand’s trade balance with each of her 15 largest partners: an asymmetry analysis

2018 ◽  
Vol 45 (3) ◽  
pp. 660-672 ◽  
Author(s):  
Mohsen Bahmani-Oskooee ◽  
Tatchawan Kanitpong
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
Design Methodology ◽  
Strong Support ◽  
Content Type ◽  
Asymmetric Effects ◽  
Currency Depreciation ◽  
Nonlinear Ardl ◽  
The Usa ◽  
Exchange Rate Changes

Purpose The purpose of this paper is to assess asymmetric effects of exchange rate changes on Thailand’s trade balances. Design/methodology/approach The design methodology is based on the nonlinear ARDL approach of Shin et al. (2014). Findings The authors find strong support for the asymmetric effects of exchange rate changes on the Thailand trade balance with most partners, including the three largest partners, China, Japan and the USA. Research limitations/implications The long-run asymmetric effects revealed that while baht depreciation will hurt Thailand’s trade balance with China, it will improve its trade balance with the USA and has no effects with Japan. Practical implications The trade balance of different partners reacts differently to currency depreciation. Social implications A currency depreciation that improves the trade balance by promoting exports also helps to reduce the rate of unemployment. Originality/value No study has assessed the asymmetric effects of exchange rate changes on the Thailand’s trade balance with its major partners.

China’s impact on pass-through to US import prices

2019 ◽  
Vol 12 (1) ◽  
pp. 55-72
Author(s):  
Michael Malenbaum
Keyword(s):  
Exchange Rate ◽  
Import Prices ◽  
Content Type ◽  
Market Shares ◽  
The Us ◽  
The Usa ◽  
Marked Decline ◽  
Pass Through ◽  
Exchange Rate Pass Through ◽  
The Impact

Purpose This paper aims to analyze the marked decline in exchange rate pass-through to US import prices in the early 2000s focusing on the increased role of China as a trade partner. In particular, the research focuses on the impact of an exporter with a fixed exchange rate having large market shares of a particular importing country. Design/methodology/approach The study uses highly disaggregated US import data and rolling regressions to calculate quarterly pass-through estimates for specific goods from every exporter. This leads to a total of over 1.7 million pass-through coefficients. The second stage compares these pass-through coefficients with China’s share of US import market for that particular good and time. Findings The paper shows that as China’s market share for specific goods grows, pass-through rates of imports from other countries falls. Pass-through rates remain relatively stable for goods that China does not export to the USA or goods for which China’s share of US imports stays constant. This relationship is stronger when the dollar decreases in value, further suggesting that pressure from China forces competitors to maintain stable prices. Originality/value This paper is unique in its use of highly disaggregated data on US imports. While many analyses of exchange rate pass-through focus on overall levels or general goods, this work uses import data at the 10-digit HTS code level. Therefore, the findings are more detailed in showing how China’s increased presence in the US market influences prices of imports from other countries.

Asymmetric impact of exchange rate changes on stock returns: evidence of two de facto regimes

2019 ◽  
Vol 19 (2) ◽  
pp. 147-173
Author(s):  
Walid M.A. Ahmed
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Stock Market ◽  
Stock Returns ◽  
Stock Prices ◽  
Spillover Effects ◽  
Content Type ◽  
Currency Depreciation ◽  
Long Run ◽  
Exchange Rate Changes

Purpose This study focuses on Egypt’s recent experience with exchange rate policies, examining the existence of spillover effects of exchange rate variations on stock prices across two different de facto regimes and whether these effects, if any, are asymmetric. Design/methodology/approach The empirical analysis is carried out using a nonlinear autoregressive distributed lag modeling framework, which permits testing for the presence of short- and long-run asymmetries. Relevant local and global factors are also included in the analysis as control variables. The authors divide the entire sample into a soft peg period and a free float one. Findings Over the soft peg regime period, both positive and negative changes in EGP/USD exchange rates seem to have a significant impact on stock returns, whether in the short or long run. Short-term asymmetric effects vanish in the free float period, while long-term asymmetries continue to exist. By and large, the authors find that currency depreciation tends to exercise a stronger influence on stock returns than does currency appreciation. Practical implications The results offer important insights for investors, regulators and policymakers. With the domestic currency depreciation having a negative impact on stock prices, investors should contemplate implementing appropriate currency hedging strategies to abate depreciation risks and, hence, preserve their expected rate of return on the Egyptian pound-denominated investments. In the current post-flotation era, the government could pursue a flexible inflation targeting monetary policy framework, with a view to both lowering the soaring inflation toward an announced target rate and stabilizing economic growth. The Central Bank of Egypt (CBE) could adopt indirect monetary policy instruments to secure tightened liquidity conditions. Besides, the CBE could raise policy rates to incentivize people to keep their money in local currency-denominated instruments, instead of dollarizing their savings, thereby relieving banks of foreign currency demand pressures. Nevertheless, while being beneficial to the country’s real economy on several aspects, such contractionary monetary measures may temporarily impinge on stock market performance. Accordingly, policymakers should consider precautionary measures that reduce the potential for price distortions and unnecessary volatility in the stock market. Originality/value To the best of the authors’ knowledge, the current study represents the first attempt to explore the potential impact of exchange rate changes under different regimes on Egypt’s stock market, thus contributing to the relevant research in this area.

Bitcoin, Litecoin, and the Euro: an annualized volatility analysis

2019 ◽  
Vol 37 (2) ◽  
pp. 229-242 ◽  
Author(s):  
Cynthia Miglietti ◽  
Zdenka Kubosova ◽  
Nicole Skulanova
Keyword(s):  
Exchange Rate ◽  
Financial Markets ◽  
Design Methodology ◽  
Daily Basis ◽  
Information Criteria ◽  
Content Type ◽  
Statistical Measures ◽  
Augmented Dickey Fuller ◽  
Volatility Analysis ◽  
Exchange Rate Changes

Purpose This paper aims to empirically investigate the volatility of Bitcoin, Litecoin and the Euro. Design/methodology/approach The authors use quantitative methodologies to assess the annualized volatility of two cryptocurrencies and one international fiat currency. The exchange rate of the currencies is monitored on a daily basis using 1,460 observations from January 1, 2014 to December 31, 2017. The models used include the augmented Dickey–Fuller test, Akaike Information Criteria, autocorrelation function and exchange rate changes determining which currency is the most volatile. Findings The findings indicate, based on the statistical measures used, including the standard deviation of selected currencies and annualized volatility, that Litecoin is more volatile than Bitcoin and the Euro and that Bitcoin is more volatile than the Euro. This furthers previous research on cryptocurrency volatility. Originality/value The paper provides compelling evidence about the volatility of Litecoin and Bitcoin. The volatility of cryptocurrencies is furthered with data that are more current. The findings are important for investors, financial markets and central banks.

Purchasing power parity as a long-term memory process

2015 ◽  
Vol 10 (4) ◽  
pp. 711-725 ◽  
Author(s):  
Mohamed Bilel Triki ◽  
Samir Maktouf
Keyword(s):  
Exchange Rate ◽  
Purchasing Power Parity ◽  
Empirical Literature ◽  
Long Term Memory ◽  
Purchasing Power ◽  
Power Parity ◽  
Fractional Cointegration ◽  
Content Type ◽  
Long Run ◽  
The Usa

Purpose – The purpose of this paper is to focus on whether the deviations from the cointegrating relationship possess long memory and the fractional cointegration analyses may capture a wider range of mean-reversion behaviour than standard cointegration analyses. Design/methodology/approach – This paper uses a fractional cointegration technique to test the purchasing power parity (PPP). Findings – The authors found that PPP held, but very weakly, in the long run between the Argentine, Brazil, Chile, Colombia, Indonesia, Korea, Mexico, Thailand and Venezuela and US exchange rate during our floating exchange rate period but that the deviations from it did not follow a stationary process. Nevertheless, it is also found that the deviations from PPP exists and can be characterized by a fractionally integrated process in nine out of 13 countries studied. Originality/value – The findings are consistent with the consensus of the empirical literature, reviewed earlier in this paper, on PPP between Argentine, Brazil, Chile, Colombia, Indonesia, Korea, Mexico, Thailand and Venezuela and the USA.

scholarly journals Healthcare systems: typologies, framework models, and South Africa’s health sector

2018 ◽  
Vol 23 (2) ◽  
pp. 134-148 ◽  
Author(s):  
Shadrack Katuu
Keyword(s):  
South African ◽  
Healthcare System ◽  
Systems Analysis ◽  
Historical Development ◽  
Health Sector ◽  
Healthcare Systems ◽  
Content Type ◽  
National Healthcare ◽  
The Usa ◽  
The Government

Purpose A healthcare system in any country is rarely the product of one logical policy-making experience, but rather a manifestation of many years of historical development. The purpose of this paper is to examine the characteristics, components, and variables of South Africa’s healthcare system in the context of global patterns. It leverages a dynamic period in South Africa since 1994, and applies a comparative health systems analysis to explain where the country’s healthcare system is, and where it is potentially going. Design/methodology/approach This paper reviews literature related to South Africa’s healthcare system, outlines its historical development, and discusses three fundamental challenges experienced in the country. This paper also reviews the literature on healthcare system typologies and identifies three framework models that have been used to categorise national healthcare systems since the 1970s. This paper then discusses the categorisation of South Africa’s healthcare system in these models, in comparison to Canada and the USA. Findings This paper finds that the framework models are useful tools for comparative analysis of healthcare systems. However, any use of such typologies should be done with the awareness that national healthcare systems are not isolated entities because they function within a larger context. They are not static, since they are constantly evolving with many nuances, even with very similar healthcare system categorisations. Originality/value This paper charts the trajectory of change in the South African healthcare system, and demonstrates that the change process must keep internal conditions in mind if the outcome is to be successful. Imitating policies of countries with well-functioning systems, without regard to local realities, may not work, as the government attempts to usher in changes within a short span of time.

scholarly journals Noncompetitive Pricing and Exchange Rate Pass-Through in Selected U.S. and Thai Rice Markets

1994 ◽  
Vol 26 (2) ◽  
pp. 406-416 ◽  
Author(s):  
K. K. Yumkella ◽  
L. J. Unnevehr ◽  
P. Garcia
Keyword(s):  
Exchange Rate ◽  
Market Power ◽  
Price Discrimination ◽  
Middle Income ◽  
Pricing To Market ◽  
Middle Income Countries ◽  
Trade Model ◽  
Inelastic Demand ◽  
Pass Through ◽  
Exchange Rate Pass Through

AbstractA “pricing to market” international trade model is applied to U.S. and Thai rice exports to high and middle income countries that are continuous rice importers. These markets are characterized by strong quality preferences and highly inelastic demand, and thus exporters may exercise market power. Evidence of noncompetitive pricing either through price discrimination across destinations or through imperfect exchange rate pass-through is found in this small but growing segment of the international rice trade.

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