Export prices, imported inputs, and domestic supply networks

Akgündüz, Yusuf Emre and Fendoğlu, Salih (2022) Export prices, imported inputs, and domestic supply networks. IMF Economic Review . ISSN 2041-4161 (Print) 2041-417X (Online) Published Online First https://dx.doi.org/10.1057/s41308-022-00159-7

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We study the impact of import intensity in production of exporters and their suppliers on exchange rate pass-through to export prices. For identification, we use rich micro-level databases – domestic firm-to-firm sales and firm-product-level customs – from a large emerging market, Turkey. We find that ignoring suppliers’ import reliance misses nearly half of the picture: while exporters’ degree of reliance on own imported goods is 24%, this number reaches nearly 40% once their suppliers are taken into account. A higher degree of import reliance by exporters’ suppliers significantly increases pass-through to export prices by inducing higher imports-driven marginal costs passing over to downstream exporters. Moreover, exporters with a higher concentration in their domestic supply networks have a higher pass-through.
Item Type: Article
Uncontrolled Keywords: Domestic supply networks; Exchange rate pass-through; Exports; Import reliance
Divisions: Faculty of Arts and Social Sciences
Depositing User: Yusuf Emre Akgündüz
Date Deposited: 23 Aug 2022 11:21
Last Modified: 23 Aug 2022 11:21
URI: https://research.sabanciuniv.edu/id/eprint/44104

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