The paper provides novel evidence on the heterogeneous response of exporting firms to exchange rate movements. Italian firm-level trade data by product and destination indeed unveil that adjustments to exchange rate variation substantially differ across export modes. The estimates show that, in the event of a domestic currency appreciation, export intermediaries react by decreasing more their price – and less their export volume – than direct manufacturing exporters; and that the different response of direct exporters and wholesale firms is not driven by firm heterogeneity in size or productivity. By examining the aggregate implications of such micro-level findings, the paper documents that, following an appreciation, aggregate bilateral exports routed through wholesale firms tend to decline by less than total direct exports. Overall, our results suggest that, in addition to facilitating trade, export intermediation may substantially contribute to stabilizing trade patterns across countries.

Bolatto, S., Grazzi, M., Tomasi, C. (2022). Export modes and firms’ adjustments to exchange rate movements. EUROPEAN ECONOMIC REVIEW, 141, 1-22 [10.1016/j.euroecorev.2021.103955].

Export modes and firms’ adjustments to exchange rate movements

Bolatto, Stefano
;
Grazzi, Marco;
2022

Abstract

The paper provides novel evidence on the heterogeneous response of exporting firms to exchange rate movements. Italian firm-level trade data by product and destination indeed unveil that adjustments to exchange rate variation substantially differ across export modes. The estimates show that, in the event of a domestic currency appreciation, export intermediaries react by decreasing more their price – and less their export volume – than direct manufacturing exporters; and that the different response of direct exporters and wholesale firms is not driven by firm heterogeneity in size or productivity. By examining the aggregate implications of such micro-level findings, the paper documents that, following an appreciation, aggregate bilateral exports routed through wholesale firms tend to decline by less than total direct exports. Overall, our results suggest that, in addition to facilitating trade, export intermediation may substantially contribute to stabilizing trade patterns across countries.
2022
Bolatto, S., Grazzi, M., Tomasi, C. (2022). Export modes and firms’ adjustments to exchange rate movements. EUROPEAN ECONOMIC REVIEW, 141, 1-22 [10.1016/j.euroecorev.2021.103955].
Bolatto, Stefano; Grazzi, Marco; Tomasi, Chiara
File in questo prodotto:
File Dimensione Formato  
bolatto_etal_EER_accepted_version.pdf

Open Access dal 30/11/2023

Tipo: Postprint
Licenza: Licenza per Accesso Aperto. Creative Commons Attribuzione - Non commerciale - Non opere derivate (CCBYNCND)
Dimensione 657.07 kB
Formato Adobe PDF
657.07 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/864046
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 4
  • ???jsp.display-item.citation.isi??? 3
social impact