Multi-product Firms and Exchange Rate Fluctuations

Arpita Chatterjee, Rafael Dix-Carneiro and Jade Vichyanond

American Economic Journal: Economic Policy, 2013, vol. 5, issue 2, 77-110

Abstract: This paper studies the effect of exchange rate shocks on export behavior of multi-product firms. We provide a theoretical framework illustrating how firms adjust their prices, quantities, product scope, and sales distribution across products in the event of exchange rate fluctuations. In response to a real exchange rate depreciation, firms increase markups for all products, but markup increases decline with firm-product-specific marginal costs of production. We find robust evidence for our theoretical predictions using Brazilian customs data containing destination-specific and product-specific export sales and quantities. The sample period covers the years 1997-2006, during which Brazil experienced a series of drastic currency fluctuations. (JEL F14, F31, F33, O19, O24)

JEL-codes: F14 F31 F33 O19 O24 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/pol.5.2.77
References: Add references at CitEc
Citations: View citations in EconPapers (123)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/pol.5.2.77 (application/pdf)
http://www.aeaweb.org/aej/pol/data/2011-0183_data.zip (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Multi-Product Firms and Exchange Rate Fluctuations (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejpol:v:5:y:2013:i:2:p:77-110

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Economic Policy is currently edited by Matthew Shapiro

More articles in American Economic Journal: Economic Policy from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().