Invoicing and the dynamics of pricing-to-market: Evidence from UK export prices around the Brexit referendum

We provide micro-econometric evidence that, following the large and persistent sterling depreciation after Brexit referendum, on impact, exchange rate pass-through (ERPT) was complete for transactions invoiced in producer currency low sales either a vehicle or destination market currency. Yet these differences strikingly narrowed within six quarters. A weaker did not translate into gain price competitiveness UK exports. At granular level we find that exporters invoice multiple currencies—even when shipping product to same destination—and switch currencies over time. Remarkably, fail detect significant changes relative shares of invoicing response shock. Last but least, firms price-to-market, i.e., adjust markups bilateral CPI movements, only they destination-market