TY - JOUR
T1 - Theoretical and empirical evidence for the impact of cross-border production sharing on exchange rate pass-through
AU - Lan, Lihuei
AU - Lin, Luke
AU - Lin, Wenyuan
AU - Chuang, Shuangshii
N1 - Funding Information:
Lihuei Lan ([email protected]) is a Ph.D. student in business administration at National Cheng Kung University, Taiwan. Luke Lin ([email protected]), corresponding author, is an associate professor of finance at National Kaohsiung First University of Science and Technology, Taiwan. Wenyuan Lin ([email protected]) is a Ph.D. student in finance at National SunYat-sen University, Taiwan. Shuangshii Chuang ([email protected]) is an associate professor of business administration at National Cheng Kung University, Taiwan. The financial support provided by the Chen-Yung Memorial Foundation is gratefully acknowledged.
PY - 2013
Y1 - 2013
N2 - This paper uses the theoretical model created by Ghosh (2009) to analyze the extent of exchange rate pass-through (ERPT) for traditional trade and different production sharing cases. Comparing the differences among these scenarios reveals that production sharing could be a reason for the continual decline in ERPT. Furthermore, empirical evidence from Taiwan indicates that under production sharing, the pricing-to-market for intermediate goods exporters and the currency fluctuation in the home country of end products exporters will further influence the magnitude of the decline in ERPT.
AB - This paper uses the theoretical model created by Ghosh (2009) to analyze the extent of exchange rate pass-through (ERPT) for traditional trade and different production sharing cases. Comparing the differences among these scenarios reveals that production sharing could be a reason for the continual decline in ERPT. Furthermore, empirical evidence from Taiwan indicates that under production sharing, the pricing-to-market for intermediate goods exporters and the currency fluctuation in the home country of end products exporters will further influence the magnitude of the decline in ERPT.
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U2 - 10.2753/REE1540-496X4905S419
DO - 10.2753/REE1540-496X4905S419
M3 - Article
AN - SCOPUS:84892604951
SN - 1540-496X
VL - 49
SP - 280
EP - 300
JO - Emerging Markets Finance and Trade
JF - Emerging Markets Finance and Trade
IS - SUPPL. 4
ER -