Do International Shocks Affect Small Wholesalers and Retailers?

Robert Feinberg

No 2009-02, Working Papers from American University, Department of Economics

Abstract: Previous research has suggested that the smallest firms are those most vulnerable to international competition, as measured by exchange rate fluctuations and import shares. However, that work – and the overwhelming bulk of the empirical literature on determinants of exit or firm survival – dealt entirely with the manufacturing sector of the economy. Are firms further down the distribution chain, small wholesalers and retailers, hurt by real exchange rate movements? Annual data for 1989-2005 are analyzed to explain small firm exit rates in several employment size categories – under 10 employees, 10-19 employees, 20-99 employees, and 100-499 employees. While there is variation across industry sectors, the basic result is that wholesalers respond negatively to a stronger currency in a manner similar to that of manufacturers, while retailers are generally unaffected.

Date: 2009-03
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https://doi.org/10.17606/rkzp-f450 First version, 2009 (application/pdf)

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Journal Article: Do international shocks affect small wholesalers and retailers? (2010)
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