Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/182400
Authors: 
Firanchuk, Alexander
Year of Publication: 
2018
Abstract: 
This paper analyses the effect of imported inputs and the exporting country share on the degree of exchange rate pass-through (ERPT) into export prices. I present a model where firms set variable markups under oligopoly competition and imported inputs affect marginal cost. It makes two predictions: (i) the imported input share reduces ERPT (ii) the exporting country share in a destination market increases ERPT. Using industry-level data, I test the hypotheses for 57 countries over the period 2000-2015. For trade between advanced economies, imported inputs reduce ERPT, but only in the case of producer currency movements. Controlling for exporting country share, the pass-through elasticity is 39% when imported inputs are not used, but 11% when the share of imported inputs in gross exports rises to one half.
Subjects: 
exchange rate pass-through
export prices
global value chains
JEL: 
F12
F14
F31
F41
Document Type: 
Working Paper

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