Market Structure and Exchange Rate Exposure: The Case of Consumable Goods

Andrikopoulos, A. & Dassiou, X. (2016). Market Structure and Exchange Rate Exposure: The Case of Consumable Goods (Report No. 16/12). London, UK: Department of Economics, City, University of London.

[img]
Preview
Text - Published Version
Download (944kB) | Preview

Abstract

We examine the impact of exchange rates on profits and prices in differentiated consumable goods markets. We model the exchange rate exposure of exporting firms operating within a Bertrand or a Cournot setting where between and within competition co-exist. We show that market structure and these two forces determine pass through and exposure. Empirical tests of real and bilateral exchange rate exposure using stock price and profit data confirm a link between the ability of a firm to pass on the exchange rate changes to its customers and the magnitude of the exposure on their rivals.

Item Type: Monograph (Discussion Paper)
Additional Information: Copyright the authors, 2016.
Uncontrolled Keywords: Exchange rate exposure; pass through elasticities; market structure; firm behavior; Between Countries Competition; Within Countries Competition
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HG Finance
Divisions: School of Social Sciences > Department of Economics > Department of Economics Discussion Paper Series
URI: http://openaccess.city.ac.uk/id/eprint/16512

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year

View more statistics