In this paper we investigate the topic of the exchange rate pass-through from the perspective of exporters. We use China’s monthly export data in transaction level from 2000 to 2006, and plot the pattern of Chinese exporters’ pricing to market behavior over time. Shedding lights on China’s export exchange rate pass-through variation over time. On average, the export pricing to market behavior follows an increase-decrease-increase pattern (N-shape) over the sample period. Along with this, We report asymmetry in firms’ pricing responses facing appreciation versus depreciation cases, and asymmetric pricing responses in a fixed exchange rate regime versus in a floating exchange rate regime. These asymmetries may help to understand the patterns found. We also find heterogeneities of...[ Read more ]

In this paper we investigate the topic of the exchange rate pass-through from the perspective of exporters. We use China’s monthly export data in transaction level from 2000 to 2006, and plot the pattern of Chinese exporters’ pricing to market behavior over time. Shedding lights on China’s export exchange rate pass-through variation over time. On average, the export pricing to market behavior follows an increase-decrease-increase pattern (N-shape) over the sample period. Along with this, We report asymmetry in firms’ pricing responses facing appreciation versus depreciation cases, and asymmetric pricing responses in a fixed exchange rate regime versus in a floating exchange rate regime. These asymmetries may help to understand the patterns found. We also find heterogeneities of pricing responses of firms engaged in different trade types and different industries. These heterogeneities may reflect different market powers behind, and are consistent with the reported pricing to market patterns. Our findings document novel evidence of the pattern of China’s exporters’ pricing to market behavior as well as their exchange rate pass-through over time.