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Article: Exchange rates and the margins of trade: Evidence from chinese exporters

TitleExchange rates and the margins of trade: Evidence from chinese exporters
Authors
KeywordsExport participation
Exchange rates
Margins of trade
Pass-through
Product churning
Issue Date2012
Citation
CESifo Economic Studies, 2012, v. 58, n. 4, p. 671-702 How to Cite?
AbstractThis article studies how real exchange rate movements affect firm export behavior, using monthly data that cover the universe of Chinese export transactions over the period of 2000-2006. Specifically, we examine exchange rate effects on an exporter's extensive (entry, exit, and product churning) and intensive margins of exports. We find significant effects on the extensive margin. A 10% real appreciation of the renminbi is associated with a 1 percentage point decline in the probability of entry, and a 0.2 percentage point increase in the probability of exit. The effects among foreign-invested enterprises almost double for both entry and exit. Despite the seemingly large effect on the extensive margins, exchange rates alone can only explain about 4% of entries and about 1.6% of exits during the sample period. The exchange-rate elasticity of exports is estimated to be around 0.4 in the first year after the shock, with most of the adjustment taking place in the first six months. This finding of a relatively fast response to exchange rate shocks is consistent with anecdotal evidence about intense competition in the Chinese export sectors. © The Author 2012. 2012. Published by Oxford University Press on behalf of Ifo Institute, Munich. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/273521
ISSN
2023 Impact Factor: 0.8
2023 SCImago Journal Rankings: 0.556
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorTang, Heiwai-
dc.contributor.authorZhang, Yifan-
dc.date.accessioned2019-08-12T09:55:49Z-
dc.date.available2019-08-12T09:55:49Z-
dc.date.issued2012-
dc.identifier.citationCESifo Economic Studies, 2012, v. 58, n. 4, p. 671-702-
dc.identifier.issn1610-241X-
dc.identifier.urihttp://hdl.handle.net/10722/273521-
dc.description.abstractThis article studies how real exchange rate movements affect firm export behavior, using monthly data that cover the universe of Chinese export transactions over the period of 2000-2006. Specifically, we examine exchange rate effects on an exporter's extensive (entry, exit, and product churning) and intensive margins of exports. We find significant effects on the extensive margin. A 10% real appreciation of the renminbi is associated with a 1 percentage point decline in the probability of entry, and a 0.2 percentage point increase in the probability of exit. The effects among foreign-invested enterprises almost double for both entry and exit. Despite the seemingly large effect on the extensive margins, exchange rates alone can only explain about 4% of entries and about 1.6% of exits during the sample period. The exchange-rate elasticity of exports is estimated to be around 0.4 in the first year after the shock, with most of the adjustment taking place in the first six months. This finding of a relatively fast response to exchange rate shocks is consistent with anecdotal evidence about intense competition in the Chinese export sectors. © The Author 2012. 2012. Published by Oxford University Press on behalf of Ifo Institute, Munich. All rights reserved.-
dc.languageeng-
dc.relation.ispartofCESifo Economic Studies-
dc.subjectExport participation-
dc.subjectExchange rates-
dc.subjectMargins of trade-
dc.subjectPass-through-
dc.subjectProduct churning-
dc.titleExchange rates and the margins of trade: Evidence from chinese exporters-
dc.typeArticle-
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1093/cesifo/ifs006-
dc.identifier.scopuseid_2-s2.0-84870321533-
dc.identifier.volume58-
dc.identifier.issue4-
dc.identifier.spage671-
dc.identifier.epage702-
dc.identifier.eissn1612-7501-
dc.identifier.isiWOS:000311904400004-
dc.identifier.issnl1610-241X-

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