The Impact of the Real Exchange Rate on Non-Traditional Exports using Microdata: Evidence from Chile and Peru.

This study estimates the Bilateral Real Exchange Rate (BRER) impact on Non-Traditional Exports (NTX) of Chilean and Peruvian firms. Different from previous works about Chile and Peru, this paper considers a heterogeneous impact of the BRER on firm's exports, depending on firm's productivity. In addition, we estimate the impact of the real exchange rate of countries whose exports compete against Peruvian and Chilean exports in third markets. This variable has been barely used in the literature and its omission causes a downward bias on the estimation of the BRER elasticity on exports. To do this, we use detailed firm-level information of products and destinations of Chilean exports from 2004 to 2011, and Peruvian exports from 2007 to 2014.