Baoying Lai is currently a Senior Lecturer within the Finance, Economics and Risk Field. She obtained her PhD in Finance from Aston Business School, Aston University Birmingham, having previously achieved an Associate Certificate in Teaching and Leaning in Higher Education and MSc in Financial Management & Control. Before Baoying joined UEL, she had several years’ teaching and research experiences in Aston Business School.  Her research interests are specifically focused on foreign exchange rates and the pricing behaviour of international goods.  

This empirical study examines the Pricing-To-Market (PTM) behaviour of 20 UK export sectors. Using both Exponential General Autoregressive Conditional Heteroscedasticity (EGARCH) and Threshold GARCH (TGARCH) estimation methods, we find evidence of PTM that is accompanied by strong conditional volatility and weak asymmetry effects. The PTM estimates suggest that when the currency of exporters appreciates in the current period, exporters pass-on between 31% and 94% of the Foreign Exchange (FX) rate increase to importers. However, both export price changes and producers' prices are sluggish, perhaps being driven by coordination failure and menu driven costs, amongst others. Furthermore, export prices contain strong time varying effects which impact on PTM strategy. Exporters do not typically appear to put much more weight on negative news of (say) an FX rate appreciation compared to positive news of an FX rate depreciation. Much depends on the export sector.