Mirko Abbritti, Economics Professor at the University of Navarra and Resident Fellow at the Navarra Center for International Development presented his paper Business Relationships, Bargaining and Trade Dynamics at the 7th NCID Research Workshop, which took place at the Fundación Ramón Areces in Madrid. 

Most of the trade relationships are governed by long term contracts which are firm to firm. There is evidence that usually the price in these transactions are set by bargaining. “If you ask to a firm which are the main reason why they don’t to change prices is because they don’t want to incur in further negotiation costs and fear losing consumer”, Abbritti said. He argued that these have been neglected from the macroeconomic literature. 

The paper analyzes the role of business to business relationship and bargaining for export dynamics and output dynamics in emerging market economies.