Exchange Rate Pass-Through and the Role of Market Shares
Michael Malenbaum ()
Additional contact information
Michael Malenbaum: Iona College
Journal of Industry, Competition and Trade, 2018, vol. 18, issue 2, 151-185
Abstract This paper examines the effects of changing market shares on exchange rate pass-through to US import prices. Based on a static model of imperfect competition, I predict that a country with a larger share of a host’s import market will have lower pass-through than its competitors. Using highly disaggregated data on US imports, I implement rolling regressions to calculate unique quarterly values of pass-through for specific goods from each exporting country. These values are compared across market shares, indicating a general trend of decreasing pass-through for larger shares. Most specifically, as predicted by the model, the country holding the largest share of the market has significantly lower pass-through than its competitors. The negative relationship between pass-through and market share holds across most categories of goods, most notably the larger categories of imports. Lastly, I show the market share effect is stronger following larger fluctuations in the exchange rate, particularly after large dollar appreciations.
Keywords: International trade; Competition; Market share; Exchange rates; Import prices (search for similar items in EconPapers)
JEL-codes: F14 F31 F41 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s10842-017-0256-1 Abstract (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:jincot:v:18:y:2018:i:2:d:10.1007_s10842-017-0256-1
Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/10842/PS2
Access Statistics for this article
Journal of Industry, Competition and Trade is currently edited by Karl Aiginger, Marcel Canoy and Michael Peneder
More articles in Journal of Industry, Competition and Trade from Springer
Bibliographic data for series maintained by Sonal Shukla ().