Consumer Arbitrage in Cross-Border E-commerce

José Anson and Mauro Boffa

No 2018/17, RSCAS Working Papers from European University Institute

Abstract: In today's internet markets consumers can search for, find and compare prices worldwide. Online, information circulates faster than offline and arbitrage opportunities such as the ones arising from currency shocks are easily unveiled. In this paper, we estimate for the first time exchange rate elasticities for cross-border e-commerce transactions. Exploiting a new high-frequency database on international transactions of parcels, we find that a 1 % appreciation of the domestic currency increases e-commerce imports by 0.7 %. Comparing the result with traditional estimates in offline markets, this implies a 50 % exchange rate pass-through online.

Keywords: Online trade; Arbitrage; Exchange rate pass-through (search for similar items in EconPapers)
JEL-codes: F (search for similar items in EconPapers)
Date: 2018-03
New Economics Papers: this item is included in nep-ict, nep-int, nep-mkt and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:rsc:rsceui:2018/17

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