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Transport Mode and the Geography of Exchange Rate Pass-Through

Author

Listed:
  • Davide Del Prete
  • Aminur Rahman
  • Edoardo Tolva

Abstract

This paper examines how transport mode shapes the geography of exchange rate pass-through (ERPT) within Global Value Chains. Using transaction-level customs data from the Bangladeshi garment sector (2018–2024), we exploit the sharp depreciation of the Bangladeshi Taka in 2022 to compare maritime and air-based trade corridors through Chittagong seaport and Dhaka airport. We show that ERPT to exporter prices is incomplete on average and systematically lower in buyer–seller relationships that rely more intensively on air transport. This differential is concentrated in destinations and products where delivery speed is especially valuable, notably European fast-fashion markets.

Suggested Citation

  • Davide Del Prete & Aminur Rahman & Edoardo Tolva, 2026. "Transport Mode and the Geography of Exchange Rate Pass-Through," CESifo Working Paper Series 12834, CESifo.
    • Handle: RePEc:ces:ceswps:_12834
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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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