Exposure of Canadian Retailers to Cross-Border Shopping

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• 研討會日期 : 2013-07-09
• 時間 : 14:30
• 主講人 : Professor Loretta Fung
• 地點 : Conference Room B110
• 演講者簡介 : Loretta Fung received her Ph.D. in Economics from University of California, Davis in 2002. She is currently Associate Professor of Economics at National Tsing Hua University. Her research fields are micro responses to exchange rate movement, international trade and investment, productivity analysis, and economic development.
• 演講摘要 : This paper uses firm-level data from 1986 to 2007 to examine the effects of same-day and multiple-day border-crossing trips by　Canadian and US residents on the probability of survival, sales and profitability of Canadian retailers. We used detailed geographic information　to assess the degree to which these effects are influenced by the location of the retailer (i.e., distance to the closest land border post). We also　investigate the role of other firm level characteristics. Previous studies have established that such border-crossing trips between Canada　and the US are strongly related to changes in relative prices induced by exchange rate movements. This suggests the potential of significant demand fluctuations　facing Canadian retailers induces by exchange rate changes. Our findings indicate that for the retail trade sector as a whole,　trips by Canadian residents have a negative effect on all performance indicators while trips by US residents have a positive effect, and these　effects diminish with distance to the border. Furthermore, we find evidence that the　effect of same-day trips is greater than overnight trips. We also investigate the effects on firms in selected retail industries we expect to　be most affected by cross-border shopping, such as grocery and apparel stores. The results indicate significant variation in the effect of crossings on firm performance depending on their　retail sub-industry. Our findings suggest that Canadian retailers react to cross-border shopping on both extensive (survival) and intensive margins　(sales), with the relative importance of the two margins depending on the industry. We also present a preliminary model of retailers with consumer search to better understand the observed 　empirical patterns and to guide our future empirical specifications.