The Price Setting Behaviour of Spanish Firms: Evidence from Survey Data
By L. J. Álvarez, I. Hernando. Social Science Research Network, 2005
112 citations recorded by the source corpus.
This paper reports the results of a survey carried out by the Banco de Espana on a sample of around 2000 Spanish firms to deepen the understanding of firms' price setting behaviour. The main findings may be summarised as follows. Most Spanish firms are price setters that use predominantly state dependent rules or a combination of time and state dependent rules when reviewing their prices. Changes in costs are the main factor underlying price increases, whereas changes in market conditions (demand and competitors' prices) are the main driving forces of price decreases. The degree of price flexibility is directly related to the share of energy inputs over total costs and to the intensity of competition, whereas it is inversely linked to the labour share. The three theories of price stickiness that receive the highest empirical support are implicit contracts, coordination failure and explicit contracts.
Subfields: Accounting, Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/8fe1faf9fb50cf0e10e9645e6e281b27f88b3288
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Economics and Econometrics
Citations in the corpus
- What Firms' Surveys Tell Us about Price-Setting Behavior in the Euro Area (2006, unknown): “(2005) for Portugal; and Álvarez and Hernando (2005) for Spain.”
- Price Setting in the Euro Area: Some Stylised Facts from Individual Producer Price Data (2012, unknown): “Cornille and Dossche (2006) illustrate these results by means of a correlation analysis whereas Álvarez and Hernando (2005) and Stahl (2006) corroborate them by using time series models.”
- Price Setting Behaviour in Spain: Evidence from Micro Ppi Data (2005, background): “The paper extends the empirical evidence on price setting behaviour in Spain obtained in other studies using micro consumer prices [Álvarez and Hernando (2004)] and survey data [Álvarez and Hernando (2005)] and contributes to enlarge the scant international evidence available on PPI individual data.”