Exchange Rate Movements and the Distribution of Productivity

Ben Tomlin and Loretta Fung

Review of International Economics, 2015, vol. 23, issue 4, 782-809

Abstract: This paper examines how movements in the real exchange rate affect the distribution of labor productivity within industries. Appreciations of the local currency expose domestic plants to more competition as export opportunities shrink and import competition intensifies. As a result, smaller less productive plants are forced from the market, which truncates the lower end of the productivity distribution, and surviving plants face a reduction in physical sales (unless they adjust their mark-up), which, in the presence of scale economies, can lower productivity. Using quantile regression, we find that movements in the exchange rate do, indeed, have distributional effects on productivity.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.1111/roie.12190 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Effect of Exchange Rate Movements on Heterogeneous Plants: A Quantile Regression Analysis (2010)
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:bla:reviec:v:23:y:2015:i:4:p:782-809

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0965-7576

Access Statistics for this article

Review of International Economics is currently edited by E. Kwan Choi

More articles in Review of International Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().