Consumer Arbitrage in Cross-Border E-Commerce

32 Pages Posted: 17 Apr 2018

See all articles by Jose Anson

Jose Anson

Universal Postal Union

Mauro Boffa

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

Matthias Helble

Asian Development Bank

Date Written: March 2018

Abstract

In today's internet markets consumers can search for, find and compare prices worldwide. Online, information circulates faster than offline and arbitrage opportunities such as the ones arising from currency shocks are easily unveiled. In this paper, we estimate for the first time exchange rate elasticities for cross-border e-commerce transactions. Exploiting a new high-frequency database on international transactions of parcels, we find that a 1 % appreciation of the domestic currency increases e-commerce imports by 0.7 %. Comparing the result with traditional estimates in offline markets, this implies a 50 % exchange rate pass-through online.

Keywords: Online trade, Arbitrage, Exchange rate pass-through

JEL Classification: F14, F31

Suggested Citation

Anson, Jose and Boffa, Mauro and Helble, Matthias, Consumer Arbitrage in Cross-Border E-Commerce (March 2018). Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 2018/17. Available at SSRN: https://ssrn.com/abstract=3157534 or http://dx.doi.org/10.2139/ssrn.3157534

Jose Anson

Universal Postal Union ( email )

Case postale 312
3000 BERNE 15
Switzerland

Mauro Boffa (Contact Author)

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

Matthias Helble

Asian Development Bank ( email )

Philippines
006326831120 (Phone)

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