Buyer Market Power, Transport Mode, and Exchange Rate Shocks

Davide Del Prete, Aminur Rahman and Edoardo Tolva
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Davide Del Prete: the University of Naples Parthenope
Aminur Rahman: Asian Development Bank
Edoardo Tolva: University of Lisbon ISEG

No 825, ADB Economics Working Paper Series from Asian Development Bank

Abstract: This paper studies how international buyers’ market power and transport mode shape the pass-through of exchange rate shocks to export prices. Using transaction level customs data from the Bangladeshi garment sector, we first document substantial buyer market power and the concentration of export activity in key trade hubs that shape transport decisions. We then show that large buyers leverage both their market power and their reliance on air freight to mitigate the impact of exchange rate fluctuations. Taken together, our findings highlight how buyer characteristics shape exporters’ adjustment to external shocks, with broader implications for regional economic resilience.

Keywords: Bangladesh; exchange rate; global value chain; market power; transport mode (search for similar items in EconPapers)
JEL-codes: D22 D43 E31 F10 L14 L22 (search for similar items in EconPapers)
Pages: 35
Date: 2025-11-28
New Economics Papers: this item is included in nep-com, nep-iaf and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:021792

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