Importers, Exporters, and Exchange Rate Disconnect

Mary Amiti, Oleg Itskhoki and Jozef Konings

American Economic Review, 2014, vol. 104, issue 7, 1942-78

Abstract: Large exporters are simultaneously large importers. We show that this pattern is key to understanding low aggregate exchange rate pass-through as well as the variation in pass-through across exporters. We develop a theoretical framework with variable markups and imported inputs, which predicts that firms with high import shares and high market shares have low exchange rate pass-through. We test and quantify the theoretical mechanism using Belgian firm-product-level data on imports and exports. Small nonimporting firms have nearly complete pass-through, while large import-intensive exporters have pass-through around 50 percent, with the marginal cost and markup channels contributing roughly equally.

JEL-codes: D24 F14 F31 L60 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.7.1942
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Citations: View citations in EconPapers (393)

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Related works:
Working Paper: Importers, Exporters, and Exchange Rate Disconnect (2013)
Working Paper: Importers, Exporters, and Exchange Rate Disconnect (2012)
Working Paper: Importers, exporters, and exchange rate disconnect (2012)
Working Paper: Importers, exporters, and exchange rate disconnect (2012)
Working Paper: Importers, Exporters, and Exchange Rate Disconnect (2012)
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