Discussion Paper Details

Please find the details for DP7923 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Product adjustments: A firm-level analysis of the impact of a real exchange rate shock

Author(s): Andreas Moxnes and Karen-Helene Ulltveit-Moe

Publication Date: July 2010

Keyword(s): firm restructuring, heterogeneous firms, product differentiation and real exchange rate shock

Programme Area(s): International Trade and Regional Economics

Abstract: Using a new and extensive micro data set we investigate the impact of a change in international competitive pressure following a real exchange shock on multi-product firms? product mix. We only find weak evidence for the core competencies hypothesis, according to which, we would expect the exposed firms to reduce their product portfolio in response to the shock. But firms exposed to the shock significantly reduced their rate of product churning, relative to the control group of nonexposed firms. Moreover, we find a strong positive link between churning in the range of imported and exported products, suggesting that the product mix of imported inputs may be an important, but less understood, margin of adjustment.

For full details and related downloads, please visit:

Bibliographic Reference

Moxnes, A and Ulltveit-Moe, K. 2010. 'Product adjustments: A firm-level analysis of the impact of a real exchange rate shock'. London, Centre for Economic Policy Research.