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How do different exporters react to exchange rate changes? Theory, empirics and aggregate implications

Author

Listed:
  • Thierry Mayer

    (Sciences Po)

  • Philippe Martin

    (Sciences Po)

  • Nicolas Berman

    (Graduate Institute of International and Development Studies)

Abstract

pervasive in sectors and destination countries with higher distribution costs. Consistent with our theoretical framework, we show that the probability of firms to enter the export market following a depreciation increases. The extensive margin response to exchange rate changes is modest at the aggregate level because firms that enter, following a depreciation, are smaller relative to existing firms.

Suggested Citation

  • Thierry Mayer & Philippe Martin & Nicolas Berman, 2010. "How do different exporters react to exchange rate changes? Theory, empirics and aggregate implications," 2010 Meeting Papers 1338, Society for Economic Dynamics.
  • Handle: RePEc:red:sed010:1338
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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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