Heterogeneous Trade Elasticity and Managerial Skills

22  September 2022    3:00 pm CEST

Gianluca Orefice, University of Paris-Dauphine

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This presentation is based on a paper co-authored with Maria Bas, Lionel Fontagné and Irene Iodice.

This paper investigates the role played by firms’ managerial skills on the heterogeneous reaction of exporters to real exchange rate changes. Our empirical analysis relies on detailed firm-product-destination level export data from France for the period 1995-2008 matched with specific information on firms’ skill composition by occupation (managers, R&D workers, professionals and technicians). Our findings show that high-skill intensive firms have larger exporter price elasticity to real exchange rate variations and a lower elasticity of export quantities. While a 10% depreciation of the real exchange rate makes firms with sample-average skill intensity charging 0.5% higher export price, we show that this effect is 40% higher for exporters with one standard deviation larger skill intensity. Managers and R&D workers contribute the most to this heterogeneous pricing-to-market behavior offirms. These findings are robust to controlling for the competing explanations of firm productivity and quality.

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Gianluca Orefice

Gianluca Orefice is Professor at the University of Paris-Dauphine and research fellow at CESifo (Munich) and CEPII (Paris). Previously he was economist at CEPII (Centre d’Etudes Prospectives et d’Information Internationales) in Paris, visiting professor at the University of Bergamo (Italy), consultant at the Economic Research and Statistics Division of the World Trade Organization (WTO).

He holds a PhD in Economics from the University of Milan and a Master in Management, Economics and Industrial Engineering from Polytechnic of Milan. He was visiting scholar at the University of California, Berkeley, and visiting student at the Universitè Catholique de Louvain. He has published on international trade and migration in several international professional journals, including the Journal of International Economics, European Economic Review, Journal of Comparative Economics, ILR Review, Regional Science and Urban Economics and the Canadian Journal of Economics. He is member of the editorial board of International Economics (Elsevier).

Main research interests: International Trade and Migration, Trade Policy and Applied Econometrics.

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Keywords: Exchange rate pass-through, heterogeneous pricing-to-market, workforce composition.

JEL classification: F12, F14 and F31.