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Multi-product firms and exchange rate fluctuations

Publication ,  Journal Article
Chatterjee, A; Rafael, DC; Vichyanond, J
Published in: American Economic Journal: Economic Policy
May 1, 2013

This paper studies the effect of exchange rate shocks on export behavior of multi-product firms. We provide a theoretical framework illustrating how firms adjust their prices, quantities, product scope, and sales distribution across products in the event of exchange rate fluctuations. In response to a real exchange rate depreciation, firms increase markups for all products, but markup increases decline with firm-product-specific marginal costs of production. We find robust evidence for our theoretical predictions using Brazilian customs data containing destination-specific and product-specific export sales and quantities. The sample period covers the years 1997-2006, during which Brazil experienced a series of drastic currency fluctuations.

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Published In

American Economic Journal: Economic Policy

DOI

EISSN

1945-774X

ISSN

1945-7731

Publication Date

May 1, 2013

Volume

5

Issue

2

Start / End Page

77 / 110

Related Subject Headings

  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 1402 Applied Economics
 

Citation

APA
Chicago
ICMJE
MLA
NLM
Chatterjee, A., Rafael, D. C., & Vichyanond, J. (2013). Multi-product firms and exchange rate fluctuations. American Economic Journal: Economic Policy, 5(2), 77–110. https://doi.org/10.1257/pol.5.2.77
Chatterjee, A., D. C. Rafael, and J. Vichyanond. “Multi-product firms and exchange rate fluctuations.” American Economic Journal: Economic Policy 5, no. 2 (May 1, 2013): 77–110. https://doi.org/10.1257/pol.5.2.77.
Chatterjee A, Rafael DC, Vichyanond J. Multi-product firms and exchange rate fluctuations. American Economic Journal: Economic Policy. 2013 May 1;5(2):77–110.
Chatterjee, A., et al. “Multi-product firms and exchange rate fluctuations.” American Economic Journal: Economic Policy, vol. 5, no. 2, May 2013, pp. 77–110. Scopus, doi:10.1257/pol.5.2.77.
Chatterjee A, Rafael DC, Vichyanond J. Multi-product firms and exchange rate fluctuations. American Economic Journal: Economic Policy. 2013 May 1;5(2):77–110.

Published In

American Economic Journal: Economic Policy

DOI

EISSN

1945-774X

ISSN

1945-7731

Publication Date

May 1, 2013

Volume

5

Issue

2

Start / End Page

77 / 110

Related Subject Headings

  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 1402 Applied Economics