Exporters and Shocks: Dissecting the International Elasticity Puzzle

Doireann Fitzgerald and Stefanie Haller

No 19968, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use micro data for Ireland to estimate how export participation and the export revenue of incumbent exporters respond to tariffs and real exchange rates. Both participation and revenue, but especially revenue, are more responsive to tariffs than to real exchange rates. Our estimates translate into an elasticity of aggregate exports with respect to tariffs of between -3.8 and -5.4, and with respect to real exchange rates of between 0.45 and 0.6, consistent with estimates in the literature based on aggregate data. We argue that forward-looking investment in customer base combined with the fact that tariffs are much more predictable than real exchange rates can explain why export revenue responds so much more to tariffs.

JEL-codes: F14 F41 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-int and nep-opm
Note: IFM ITI
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Citations: View citations in EconPapers (54)

Published as Doireann Fitzgerald & Stefanie Haller, 2018. "Exporters and Shocks," Journal of International Economics, .

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Working Paper: Exporters and Shocks: Dissecting the International Elasticity Puzzle (2014)
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