Vertical Product Differentiation and Exchange Rate Pass-Through:Evidence from Japanese Exports to China
In this paper, we investigate the impact of vertical product differentiation on exchange rate pass-through (ERPT).We define vertical product differentiation as a spectrum of products that range from the higher end to the lower end in quality, sophistication and value in a particular industry.Using a comprehensive dataset that includes highly disaggregated products traded between China and Japan from Jan 2000 to Dec 2011, we proxy product vertical differentiation with unit values of imports and exports.Our empirical analysis shows that exchange rate pass-through of Japanese exports to China yuan is incomplete and varies with the degree of vertical product differentiation.In particular,Japanese exports with relatively higher unit values have higher exchange rate pass-through, which suggests that Japanese firms with exports on the higher end of the vertical product differentiation spectrum maintain higher market power and able to keep their Japanese yen markup more stable by passing through exchange rate changes to local prices in China.
国际会议
广州
英文
419-456
2017-11-23（万方平台首次上网日期，不代表论文的发表时间）