Pricing Conditions in the European Common Market: An Empirical Cross-Country Analysis

Abstract

Pricing is a critical issue for firms operating in Europe. A structural analysis of the pricing conditions in three industries in six EC countries is performed and the implications for pan-European pricing are discussed. The analysis reveals that existing structural differences between countries are too large to be ignored. However, the internationalization of the retail industry across Europe is putting increasing pressure on consumer goods firms to align their prices. Finally, two strategic approaches to deal with this dilemma are presented.