Asymmetric Exchange Rate Pass-Through, Market Share and Import Pricing

Poornima Varma ()
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Poornima Varma: Indian Institute of Management Ahmedabad

Chapter 8 in Pulses for Food and Nutritional Security of India, 2022, pp 97-114 from Springer

Abstract: Abstract The current chapter is devoted to examine the role of country-specific market share on exchange rate pass-through and pricing behaviour of major pulses imported to India. The analysis in this chapter shows that the exchange rate pass-through is increasing in market share and after reaching a maximum it declines. The results provide new empirical insights into an inverted U shape relationship between exchange rate pass-through and market share. There have not been many analyses to see the influence of market shares on exchange rate pass-through in the food and agricultural sector. This chapter is making an attempt to analyse the impact of market share on exchange rate pass-through trade by analysing the asymmetric nature of exchange rate pass-through in market share. Our analysis in this chapter also provided empirical evidence for asymmetric exchange rate pass-through in market share. The analysis of long-run exchange rate pass-through is also undertaken in this chapter, and the results provide empirical support for incomplete of partial exchange rate pass-through in the long run as well. The long-run elasticity came out to be significant.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isbchp:978-981-19-3185-7_8

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DOI: 10.1007/978-981-19-3185-7_8

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