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Consumer arbitrage in cross‐border e‐commerce

Author

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  • José Anson
  • Mauro Boffa
  • Matthias Helble

Abstract

In today’s internet markets consumers can search for, find and compare prices worldwide. Online, information circulates faster than offline and arbitrage opportunities such as the ones arising from currency shocks are easily unveiled. In this paper, we estimate for the first‐time exchange rate elasticities for cross‐border e‐commerce transactions. Exploiting a new high‐frequency database on international transactions of parcels, we find that a 1% appreciation of the domestic currency increases e‐commerce imports by 0.7%. Comparing the result with traditional estimates in offline markets, this implies a 50% exchange rate pass‐through online.

Suggested Citation

  • José Anson & Mauro Boffa & Matthias Helble, 2019. "Consumer arbitrage in cross‐border e‐commerce," Review of International Economics, Wiley Blackwell, vol. 27(4), pages 1234-1251, September.
  • Handle: RePEc:bla:reviec:v:27:y:2019:i:4:p:1234-1251
    DOI: 10.1111/roie.12424
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    Cited by:

    1. Hayakawa, Kazunobu & Mukunoki, Hiroshi, 2022. "How does additive manufacturing change trade?: evidence from trade in sound recordings," IDE Discussion Papers 848, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    2. Daniel Penido de Lima Amorim & Marcelo Resende, 2024. "Exchange Rate Pass-Through to Brazilian E-Commerce Prices," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 16(1), pages 25-43, January.
    3. Lifan Yang & Jiatian Dong & Weixin Yang, 2024. "Analysis of Regional Competitiveness of China’s Cross-Border E-Commerce," Sustainability, MDPI, vol. 16(3), pages 1-20, January.

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