| Popis: |
Firms that dominate global trade export to multiple countries and frequently change their foreign destinations. We develop a new empirical framework for analysing markup elasticities to the exchange rate in this environment. The framework embodies a new estimator of these elasticities that controls for endogenous market participation and a new classification of products based on Chinese linguistics to proxy for firms’ power in local markets. Applying this framework to Chinese customs data, we document significant pricing-to-market for highly differentiated goods. Measured in the importer’s currency, the prices of highly differentiated goods are far more stable than those of less differentiated products. We thank Cambridge INET, the Centre For Macroeconomics, and the Economic and Social Research Council (United Kingdom) Brexit Priority Grant R001553/1 for supporting our research. We thank the staff of the HMRC datalab, especially Yee-Wan Yau, for supporting us in our analysis of UK administrative data. |
