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Do International Shocks Affect Small Wholesalers and Retailers?

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  • Robert M. Feinberg

Abstract

Previous research has suggested that the smallest firms are those most vulnerable to international competition, as measured by exchange rate fluctuations and import shares. However, that work – and the overwhelming bulk of the empirical literature on determinants of exit or firm survival – dealt entirely with the manufacturing sector of the economy. Are firms further down the distribution chain, small wholesalers and retailers, hurt by real exchange rate movements? Annual data for 1989-2005 are analyzed to explain small firm exit rates in several employment size categories – under 10 employees, 10-19 employees, 20-99 employees, and 100-499 employees. While there is variation across industry sectors, the basic result is that wholesalers respond negatively to a stronger currency in a manner similar to that of manufacturers, while retailers are generally unaffected.

Suggested Citation

  • Robert M. Feinberg, 2009. "Do International Shocks Affect Small Wholesalers and Retailers?," Working Papers 2009-02, American University, Department of Economics.
    • Handle: RePEc:amu:wpaper:2009-02
    DOI: 10.17606/rkzp-f450
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    1. repec:diw:diwwpp:dp1323 is not listed on IDEAS
    2. Robert M. Feinberg & Thomas A. Husted & Florian Szücs, 2015. "Does State Antitrust Enforcement Drive Establishment Exit?," Journal of Competition Law and Economics, Oxford University Press, vol. 11(1), pages 85-106.
    3. Bruce Blonigen & Benjamin Liebman & Wesley Wilson, 2013. "Antidumping and Production-Line Exit: The Case of the US Steel Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(4), pages 395-413, June.
    4. Toraganlı, Nazlı & Yazgan, M. Ege, 2016. "Exchange rates and firm survival: An examination with Turkish firm-level data," Economic Systems, Elsevier, vol. 40(3), pages 433-443.

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    More about this item

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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