Showing papers by "Robert C. Feenstra published in 1993"
TL;DR: In this article, the authors used a Bertrand differentiated products model to show that pass-through should be high for exporters based in a country with a very large share of total destination market sales.
216 citations
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TL;DR: In this article, the authors explored the relationship between exchange rate pass-through and market share for monopolistically competitive exporters, and showed that passthrough should be high for exporters based in a country with a very large share of total destination market sales.
Abstract: This paper explores the relationship between exchange rate pass-through and market share for monopolistically competitive exporters. Under fairly general assumptions we show that pass-through should be high for exporters based in a country with a very large share of total destination market sales. For source countries with small and intermediate market shares, the theoretical relationship is potentially nonlinear and sensitive to assumptions about the nature of consumer demand and firm interactions. The model is estimated using a panel data set of automobile exports from France, Germany, Sweden, and the United States to a variety of destinations over the period 1970-88. The empirical relationship between pass-through and market share is significantly nonlinear: pass-through is lowest when the source country's market share is around 45 percent and it is highest when the source country's share approaches 100 percent.
192 citations
TL;DR: The authors examined the effect of Mexico's entry into NAFTA on agricultural trade with California and found that agriculture remains the industry least susceptible to freer trade, despite the fact that historically, agriculture has been the most heavily distorted industry in the industrial countries.
2 citations
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TL;DR: In this article, the authors identify conditions under which hedonic price indexes provide an exact measure of consumer welfare, so that the welfare effects of quality change can be inferred, and provide a rational for existing practices, though the conditions needed to justify these practices are somewhat restrictive.
Abstract: The purpose of this paper is to identify conditions under which hedonic price indexes provide an exact measure of consumer welfare, so that the welfare effects of quality change can be inferred. Our results are quite positive in providing a rational for existing practices, though the conditions needed to justify these practices are somewhat restrictive. An application of our results is provided to the increase in characteristics of Japanese autos sold in the United States following the imposition of quotas in 1981. We argue that consumers did not value the additional characteristics at their former shadow-values, but rather, attached a lower value to the increase in characteristics. We compute the exact index that reflects this lower imputed value, and compare it to the conventional quality adjustment. The deadweight loss associated with the quality change is between one-quarter and one-third of the value of upgrading.
1 citations