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Buyer Market Power, Transport Mode, and Exchange Rate Shocks

Author

Listed:
  • Davide Del Prete

    (the University of Naples Parthenope)

  • Aminur Rahman

    (Asian Development Bank)

  • Edoardo Tolva

    (University of Lisbon ISEG)

Abstract

This paper studies how international buyers’ market power and transport mode shape the pass-through of exchange rate shocks to export prices. Using transaction level customs data from the Bangladeshi garment sector, we first document substantial buyer market power and the concentration of export activity in key trade hubs that shape transport decisions. We then show that large buyers leverage both their market power and their reliance on air freight to mitigate the impact of exchange rate fluctuations. Taken together, our findings highlight how buyer characteristics shape exporters’ adjustment to external shocks, with broader implications for regional economic resilience.

Suggested Citation

  • Davide Del Prete & Aminur Rahman & Edoardo Tolva, 2025. "Buyer Market Power, Transport Mode, and Exchange Rate Shocks," ADB Economics Working Paper Series 825, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:021792
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    Keywords

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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
    • F10 - International Economics - - Trade - - - General
    • 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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