Importers and exporters in exchange rate pass-through and currency invoicing

• 成果类型: Article
• 署名作者: Devereux, Michael B.; Dong, Wei; Tomlin, Ben
• 署名单位: University of British Columbia; Bank of Canada
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2016.12.011
• 发表日期: 2017
• 页码: 187-204
• 关键词: exchange rate pass-through; market structure; Currency of invoicing; TRADE

摘要

We explore the role of product market structure on exchange rate pass-through and currency of invoicing in international trade, using very detailed transaction-level data on Canadian imports over a six-year period. A novel feature of the study is the importance of market share on both sides of the importing relationship that of the exporting and importing firms. We find that exchange rate pass-through and the currency of invoicing are dependent on the size (or market share) of both importers and exporters. Very small or very large exporters have higher rates of pass-through and tend to invoice in the foreign currency, while it is the opposite for exporters in the middle range. By contrast, for larger importers, pass-through is lower and local currency invoicing is more prevalent. These findings are consistent with a simple model of trade pricing under monopolistic competition with endogenous markups and heterogeneity in firm size (on both sides of the transaction). (C) 2017 Elsevier B.V. All rights reserved.