Food inflation pass‐through from agricultural imports in a small open economy
构建了一个量化小型开放经济中成本传导的新框架，通过估计企业对农业进口价格冲击的加价反应，发现加价调整取决于企业对进口投入的依赖和需求曲率，并利用韩国食品制造业数据揭示了企业异质性对通胀传导的重要影响。
Abstract This paper develops a new framework for quantifying cost pass‐through in a small open economy by estimating firm‐level markup responses to agricultural import price shocks. We show theoretically that markup adjustments depend on firms' reliance on imported inputs and demand curvature, generating heterogeneous inflationary effects across firm types. For empirical implementation, we postulate a Leontief production structure that expresses pass‐through elasticity as a function of observed markup behavior and imported crop dependence. Using data on 10,911 South Korean food manufacturers from 2000 to 2021, we document considerable market power and increasing polarization in markups, particularly led by high‐markup firms. Markup elasticities under strategic pricing decisions differ across sectors and firm types, with particularly strong effects for non‐large firms exhibiting low reliance on imported crops. Our firm‐level pass‐through measure reveals stable aggregate patterns over time but uncovers considerable heterogeneity—most notably, rising pass‐through among firms less dependent on foreign crops. These findings illustrate how cost shocks propagate through strategic pricing and underscore the importance of firm heterogeneity in evaluating equilibrium pass‐through.