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Consumer Arbitrage in Cross-Border E-commerce

Author

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  • José Anson
  • Mauro Boffa

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

  • José Anson & Mauro Boffa, 2018. "Consumer Arbitrage in Cross-Border E-commerce," RSCAS Working Papers 2018/17, European University Institute.
    • Handle: RePEc:rsc:rsceui:2018/17
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    References listed on IDEAS

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    More about this item

    Keywords

    Online trade; Arbitrage; Exchange rate pass-through;
    All these keywords.

    JEL classification:

    • F - International Economics
    • F - International Economics

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