Invoicing currency, exchange rate pass‐through, and value‐added trade: The case of Turkey

Hülya Saygılı

International Journal of Finance & Economics, 2023, vol. 28, issue 4, 4401-4419

Abstract: We explore the role of invoicing currency and global production integration in the effect of exchange rate pass‐through on import and export prices. We use 3‐digit product‐level data classified by end use and 2‐digit sector‐level data displaying varying integration with global value chains from an emerging country, Turkey. Overall, pass‐through rate significantly affects both export and import prices. Contrary to the literature, pass‐through is significantly higher for local currency‐priced goods. The relative rate of pass‐through to the U.S. dollar and euro‐priced goods is determined by the type of products and value‐added trade. Stronger integration with global value chains and the use of a vehicle currency tend to smooth out the response of domestic prices to changes in exchange rates.

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/ijfe.2657

Related works:
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:wly:ijfiec:v:28:y:2023:i:4:p:4401-4419

Ordering information: This journal article can be ordered from
http://jws-edcv.wile ... PRINT_ISSN=1076-9307

Access Statistics for this article

International Journal of Finance & Economics is currently edited by Mark P. Taylor, Keith Cuthbertson and Michael P. Dooley

More articles in International Journal of Finance & Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().