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

  • Thierry Mayer

    (Sciences Po)

  • Philippe Martin

    (Sciences Po)

  • Nicolas Berman

    (Graduate Institute of International and Development Studies)

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.

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Paper provided by Society for Economic Dynamics in its series 2010 Meeting Papers with number 1338.

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Date of creation: 2010
Date of revision:
Handle: RePEc:red:sed010:1338
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Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

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