Global value chains and exchange rate pass-through into the import prices of Japanese industries

Fabien Rondeau and Yushi Yoshida

Japan and the World Economy, 2025, vol. 74, issue C

Abstract: With internationally fragmented processes of production via global value chains, value-added components of a country’s export include the importer’s contributions as well as that of exporters. The exchange rate sensitivity of export price reflects these value-added components. We examine the effect of value-added contributions of exporters and importers on the degree of exchange rate pass-through by focusing on the Japanese import prices by industries. Our results show that exchange rate pass-through increases for industries with a higher contribution of exporting countries’ value added and for industries with a lower contribution of the importing country’s value added. The differentials in value added among industries help explain the dynamics of exchange rate pass-through at the industry level.

Keywords: Exchange rate pass-through; Global value chains; Value added in trade (search for similar items in EconPapers)
JEL-codes: F14 F61 (search for similar items in EconPapers)
Date: 2025
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Related works:
Working Paper: Global value chains and exchange rate pass-through into the import prices of Japanese industries (2025)
Working Paper: Global Value Chains and Exchange Rate Pass-through into the Import Prices of Japanese Industries (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:japwor:v:74:y:2025:i:c:s0922142525000039

DOI: 10.1016/j.japwor.2025.101299

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