 Currency Shocks to Export Sales of Importers: A Heterogeneous Firms Model and Czech Micro EstimatesWorking Papers from Czech National Bank, Research and Statistics Department Abstract: To what extent can Czech exporters cushion the impact of currency appreciation shocks by using imported intermediates? We apply a partial equilibrium model with firms that are heterogeneous in their productivities. Producers can serve the domestic market, export final goods, or import inputs. In the model, an exogenous exchange rate shock simultaneously affects the variable costs and revenues associated with exports and imports. The impact of a hypothetical 1% appreciation of the domestic currency on sales is estimated using a panel of 7,356 Czech manufacturing firms observed from 2003 to 2006. We identify the estimates from within-firm variation in trade strategies, which is probably associated with the lifting of trade barriers due to Czech EU membership since 2004. For firms that both export and import, we predict a drop in total sales of 0.2%, a drop in export sales of 0.8%, and a rise in domestic sales of 0.2%. Keywords: Exchange rate pass-through; heterogeneous firms; international trade; monopolistic competition; production function; total factor productivity. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cnb:wpaper:2013/04 Access Statistics for this paper More papers in Working Papers from Czech National Bank, Research and Statistics Department Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.