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2022 | OriginalPaper | Chapter

8. Asymmetric Exchange Rate Pass-Through, Market Share and Import Pricing

Author : Poornima Varma

Published in: Pulses for Food and Nutritional Security of India

Publisher: Springer Nature Singapore

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Abstract

The current chapter is devoted to examine the role of country-specific market share on exchange rate pass-through and pricing behaviour of major pulses imported to India. The analysis in this chapter shows that the exchange rate pass-through is increasing in market share and after reaching a maximum it declines. The results provide new empirical insights into an inverted U shape relationship between exchange rate pass-through and market share. There have not been many analyses to see the influence of market shares on exchange rate pass-through in the food and agricultural sector. This chapter is making an attempt to analyse the impact of market share on exchange rate pass-through trade by analysing the asymmetric nature of exchange rate pass-through in market share. Our analysis in this chapter also provided empirical evidence for asymmetric exchange rate pass-through in market share. The analysis of long-run exchange rate pass-through is also undertaken in this chapter, and the results provide empirical support for incomplete of partial exchange rate pass-through in the long run as well. The long-run elasticity came out to be significant.
Footnotes
1
Marazzi et al., (2005) and Aziz et al., (2013).
 
2
Studies generally uses Gross Domestic Product (GDP) of the economy as a proxy to capture the demand for imports (Barhoumi, 2006; Campa and Goldberg, 2005; Gaulier et al., 2008). Since the present study is at a disaggregated level, we use value of output for these crops instead of GDP as a proxy for domestic demand.
 
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Metadata
Title
Asymmetric Exchange Rate Pass-Through, Market Share and Import Pricing
Author
Poornima Varma
Copyright Year
2022
Publisher
Springer Nature Singapore
DOI
https://doi.org/10.1007/978-981-19-3185-7_8

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