Pricing-to-Market at Firm Level: Evidence from the Russian Wheat Export Market

Russia emerged as an important wheat exporter in recent years raising the question how this will affect international wheat markets. In particular developing countries – the main destination of Russian wheat exports – could be harmed by an aggressive pricing behavior. This paper analyses the exertion of market power by Russian wheat exporting firms based on Krugman’s pricing-to-market (PTM) hypothesis. Adopting Knetter’s panel model, we find Russian PTM behavior in 37 out of 59 destination countries over the period 1998-2011