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A New Evidence for Exchange Rate Pass-through: Disaggregated Trade Data from Local Ports

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  • Yushi Yoshida

    ()
    (Faculty of Economics, Kyushu Sangyo University)

Abstract

For the estimation of exchange rate pass-through (henceforth ERPT), except for few evidences based on firm-level data, even the most disaggregated level of national export data is still biased with aggregation over sub-regions within an exporting country. We investigate to what extent this aggregation within product category is biased by comparing ERPT estimates across local ports. We use monthly exports at the HS 9-digit level from January 1988 to December 2005 for five major Japanese ports. In a panel data regression framework we control for exporting industry and importing country. Statistical tests provide strong evidence that export prices are set at different levels across local ports and that they correspond differently with respect to fluctuations of exchange rates.

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File URL: http://www.kyusan-u.ac.jp/J/yushi/MyPapers/dp31R.pdf
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File URL: http://www.ip.kyusan-u.ac.jp/keizai-kiyo/dp31.pdf
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Bibliographic Info

Paper provided by Kyushu Sangyo University, Faculty of Economics in its series Discussion Papers with number 31.

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Length: 36 pages
Date of creation: Jul 2008
Date of revision: Dec 2008
Publication status: Forthcoming in International Review of Economics and Finance, 2009
Handle: RePEc:kyu:dpaper:31

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Keywords: Exchange rate pass-through; Firm heterogeneity; Japanese trade; Port-level trade; pricing-to-market;

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References

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  1. Rudiger Dornbusch, 1985. "Exchange Rates and Prices," NBER Working Papers 1769, National Bureau of Economic Research, Inc.
  2. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
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  17. Knetter, Michael M, 1989. "Price Discrimination by U.S. and German Exporters," American Economic Review, American Economic Association, vol. 79(1), pages 198-210, March.
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Cited by:
  1. Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2010. "Exchange rate pass-through: A generalization," Journal of Mathematical Economics, Elsevier, vol. 46(4), pages 493-504, July.

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