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On the link between distribution's margins and exchange rates: the role of globalization

  • Cédric Durand


    (CEMI - Centre d'étude des modes d'industrialisation - EHESS - École des hautes études en sciences sociales, CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)

  • Antonia Lòpez-Villavicencio


    (CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)

In this paper, we analyze the differences in the sensibility of the distribution and transportation margin to exchange rate variations among different sectors in several European countries between 1995 and 2007. On the one hand, we provide new evidence that the margin reacts to exchange rate movements, a fact that may help to explain the still unresolved puzzle concerning the incomplete pass-through of the exchange rate to consumer prices. On the other hand, we look for indications of the characteristics of global value chains governance through the evolution of distributional margins. In addition, in order to draw more subtle conclusions, one original feature of this work is that we empirically allow for asymmetrical reactions of distributional margins to depreciations or appreciation, an effect that was previously ignored in the literature.

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Paper provided by HAL in its series CEPN Working Papers with number hal-00611862.

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Date of creation: 20 May 2011
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Handle: RePEc:hal:cepnwp:hal-00611862
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  1. Berger, David & Faust, Jon & Rogers, John H. & Steverson, Kai, 2012. "Border prices and retail prices," Journal of International Economics, Elsevier, vol. 88(1), pages 62-73.
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  5. Cédric Durand & Neil Wrigley, 2009. "Institutional and economic determinants of transnational retailer expansion and performance: a comparative analysis of Wal-Mart and Carrefour," Environment and Planning A, Pion Ltd, London, vol. 41(7), pages 1534-1555, July.
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  8. Christopher J. Gust & Sylvain Leduc & Robert J. Vigfusson, 2010. "Entry dynamics and the decline in exchange-rate pass-through," International Finance Discussion Papers 1008, Board of Governors of the Federal Reserve System (U.S.).
  9. Neiman, Brent, 2010. "Stickiness, synchronization, and passthrough in intrafirm trade prices," Journal of Monetary Economics, Elsevier, vol. 57(3), pages 295-308, April.
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  11. Campa, Jose M. & Goldberg, Linda S., 2002. "Exchange rate pass-through into import prices: A macro or micro phenomenon?," IESE Research Papers D/475, IESE Business School.
  12. Hellerstein, Rebecca, 2008. "Who bears the cost of a change in the exchange rate? Pass-through accounting for the case of beer," Journal of International Economics, Elsevier, vol. 76(1), pages 14-32, September.
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  15. Robert Feenstra, 2003. "Integration Of Trade And Disintegration Of Production In The Global Economy," Working Papers 986, University of California, Davis, Department of Economics.
  16. Cédric Durand & Céline Baud, 2012. "Financialization, globalization and the making of profits by leading retailers," Post-Print halshs-00737045, HAL.
  17. Devereux, Michael B. & Yetman, James, 2010. "Price adjustment and exchange rate pass-through," Journal of International Money and Finance, Elsevier, vol. 29(1), pages 181-200, February.
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