Why firms set different export prices? Evidence from Spain

Using firm-level export data for the 2010–2014 period, we investigate the variation of export prices across and within Spanish manufacturing firms. We find that more productive firms set higher export prices. However, this result is not robust to controlling for other firm-level characteristics and alternative productivity measures. We show that firms set higher export prices in more distant markets and in destinations with high GDP per capita, and lower export prices in large and low-competition markets. These latter results suggest that firms adjust the quality of their products to destination characteristics.