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Global value chains and exchange rate pass-through into the import prices of Japanese industries

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  • Rondeau, Fabien
  • Yoshida, Yushi

Abstract

With internationally fragmented processes of production via global value chains, value-added components of a country’s export include the importer’s contributions as well as that of exporters. The exchange rate sensitivity of export price reflects these value-added components. We examine the effect of value-added contributions of exporters and importers on the degree of exchange rate pass-through by focusing on the Japanese import prices by industries. Our results show that exchange rate pass-through increases for industries with a higher contribution of exporting countries’ value added and for industries with a lower contribution of the importing country’s value added. The differentials in value added among industries help explain the dynamics of exchange rate pass-through at the industry level.

Suggested Citation

  • Rondeau, Fabien & Yoshida, Yushi, 2025. "Global value chains and exchange rate pass-through into the import prices of Japanese industries," Japan and the World Economy, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:japwor:v:74:y:2025:i:c:s0922142525000039
    DOI: 10.1016/j.japwor.2025.101299
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    More about this item

    Keywords

    Exchange rate pass-through; Global value chains; Value added in trade;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts

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