Pricing to Market Behaviour and The Impacts on Export Prices of Indonesian Industrial Products
- DOI
- 10.2991/icied-17.2018.9How to use a DOI?
- Keywords
- Pricing to Market, Market Heterogeneity, Product Differentiation, Indonesia
- Abstract
In this paper, the pricing behavior of Indonesian Industrial Product Exporters was studied by estimating the degree of Exchange Rate Pass Through (ERPT) of Industrial Export Product Price (at the 4-digit level of Harmonized System classification) towards two Indonesian major trading partners in facing the exchange rate fluctuations during 2005-2014 on basis of the market heterogeneity. The Pricing to Market (PTM) model was estimated through the panel data regression model of exports to China and Japan markets. This was to distinguish commodities based on its industrial sector (2 digit ISIC classification) and to correct changes in the level of inflation and openness in the export destination market, a macroeconomic policy index partly reflecting changes in exporter's costs, the share of the exporter in the destination market and the share of the products in the exporter's total exports. It was found that, in Indonesia, differences between export markets are more important than differences across industry. To sum, when the PTM behavior occurs, a country using exchange rate as an instrument to fix the trade balance would face challenges
- Copyright
- © 2018, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Pratiwi D. Chondro AU - Telisa A. Falianty PY - 2017/12 DA - 2017/12 TI - Pricing to Market Behaviour and The Impacts on Export Prices of Indonesian Industrial Products BT - Proceedings of the 2nd International Conference on Indonesian Economy and Development (ICIED 2017) PB - Atlantis Press SP - 43 EP - 47 SN - 2352-5398 UR - https://doi.org/10.2991/icied-17.2018.9 DO - 10.2991/icied-17.2018.9 ID - D.Chondro2017/12 ER -