Does a country’s export structure impact the way that exchange rates affect trade? Do more sophisticated products exhibit lower demand elasticities? We used OECD's definition of technology levels, based on the ratio of R&D spending to value-added. According to them, the goods could be classified into four categories: high technology (HT), medium high technology (MHT), medium low technology (MLT), or low technology (LT). To measure the sophistication of a country’s export basket, we employ the export sophistication indexes (ESI). These indexes assume that products exported by richer countries are more technologically sophisticated. Using panel data for major exporters over the 1992-2016 period and dynamic ordinary least squares techniques; we find that price elasticities are higher for low-technology goods such as textiles and footwear than for high-technology goods such as pharmaceuticals and medical equipment. We also find that elasticities are larger for less advanced countries such as China than for more advanced countries such as Switzerland. The important implication of these findings is that low-technology products such as textiles and apparel, footwear, and wood have high price elasticities. Exchange rate appreciations can thus deter exports of these products. On the other hand, appreciations would reduce exports of high-technology products such as pharmaceuticals and medical equipment only a little, if at all. For medium-technology exports, exchange rate appreciations would deter exports for motor vehicles and furniture. These high price elasticities probably arise because the markets for motor vehicles and furniture are very competitive with lots of substitutes available from different countries. We draw policy implications from these findings for countries exposed to safe haven capital flows, for countries facing long-term appreciation pressures, and for countries that specialize in low-technology exports. This paper assumed that exports in the same product category from different countries are similar. Future research should investigate whether exports of products from sophisticated countries have lower elasticities then exports of the same products from less sophisticated countries.

JEL classification numbers: F14, F10

Keywords: Exchange rate elasticities; Export sophistication