[ 30th September 2022 by Sinrol Zhang Hnu 0 Comments ]

Pricing to pass‐through under volatile exchange rate scenario in the US manufacturing, Prof. Tantatape Brahmasrene and Dr. Jui‐Chi Huang

Prof. Tantatape Brahmasrene
Purdue University North Central
Email: tapeb@pnc.edu
Dr. Jui‐Chi Huang
Pennsylvania State University

DOI: 10.1108/20425961201000005

Abstract: A plethora of studies suggests the pricing decisions depend on product substitutability, costs, market structures, and the magnitude of exchange rate uncertainty in the international setting. Taking a departure from existing literature, this paper examines the average degree of exchange rate pass‐through to the prices of export product under low to high exchange rate volatility. A panel data estimation method is performed using the annual US export data to 69 export destinations across 111 four‐digit Standard Industrial Classification (SIC) industries. An average zero or insignificant pass‐through estimate for all industries in the high exchange‐rate‐fluctuation sub‐sample confirms the hypothesis. In this period of high exchange risk, the possible high hedging engagements disconnect the relationship between exchange rate movements and export pricing.
Keywords: Pass‐through; Foreign exchange volatility; International pricing.
Citation: Brahmasrene, T. and Huang, J. (2010), "Pricing to pass‐through under volatile exchange rate scenario in the US manufacturing", World Journal of Entrepreneurship, Management and Sustainable Development, Vol. 6 No. 1/2, pp. 53-60. https://doi.org/10.1108/20425961201000005

WJEMSD V6 N1_2 2010 Brahmasrene_Huang.pdf
WJEMSD V6 N1_2 2010 Brahmasrene_Huang.pdf
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