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The study explains the export pricing behaviour of Egyptian firms using detailed customs data. Firstly, it finds that more productive firms (as proxied by their importation of intermediate inputs and capital goods) charge higher export prices, which are correlated with higher revenues. This provides evidence of competition in quality, rather than price, amongst firms. Secondly, firms with more destination markets charge a higher price, on average, for their exported products and a wider price range across markets.
ABSTRACT:
Thirdly, firms charge higher prices for more distant and richer markets, whereas they charge lower prices for larger and more remote ones, with the effect of significant remoteness being confined to the richer subset of markets.
Thirdly, firms charge higher prices for more distant and richer markets, whereas they charge lower prices for larger and more remote ones, with the effect of significant remoteness being confined to the richer subset of markets.
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