Consumer Arbitrage in Cross‐Border E‐Commerce

18 Pages Posted: 5 Jun 2020

See all articles by José Anson

José Anson

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne)

Mauro Boffa

Universal Postal Union

Matthias Helble

Asian Development Bank; ADBI; ADBI

Date Written: September 2019

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.

Suggested Citation

Anson, José and Boffa, Mauro and Helble, Matthias, Consumer Arbitrage in Cross‐Border E‐Commerce (September 2019). Review of International Economics, Vol. 27, Issue 4, pp. 1234-1251, 2019, Available at SSRN: https://ssrn.com/abstract=3618548 or http://dx.doi.org/10.1111/roie.12424

José Anson (Contact Author)

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne) ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland

Mauro Boffa

Universal Postal Union

Case postale 312
3000 BERNE 15
Switzerland

Matthias Helble

Asian Development Bank ( email )

Philippines
006326831120 (Phone)

ADBI ( email )

Kasumigaseki Building 8F
3-2-5, Kasumigaseki, Chiyoda-ku
Tokyo, 100-6008
Japan

ADBI ( email )

Kasumigaseki Building 8F
3-2-5, Kasumigaseki, Chiyoda-ku
Tokyo, 100-6008
Japan

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