Exchange rate movements and export market dynamics: Evidence from China

Artikel

This paper highlights the relationship between foreign exchange rate fluctuations and firms' export market dynamics using a Chinese firm-level production data and a firm-level trade data over the period of 2000-2006. This study adopts a discrete-time survival model in our empirical investigation and further executes several extensions and robustness checks to the baseline results. The main results of the paper can be summarized as follows: First, an exchange rate appreciation increases the likelihood of export market exit and decreases the probability of export market entry. Second, high productivity firms are less likely to exit from export markets and more likely to enter export markets in the period of exchange rate appreciation. Third, exchange rate appreciation decreases the likelihood of export market entering and increases the likelihood of export market exiting more for private-owned firms, young firms and non-eastern firms. Finally, other sources of heterogeneity, such as extensive margins, import demand elasticity, different destinations, U.S. dollar peg, and the liberalization of trading rights is also important to the effects of exchange rate changes.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Economics: The Open-Access, Open-Assessment E-Journal ; ISSN: 1864-6042 ; Volume: 11 ; Year: 2017 ; Issue: 2017-23 ; Pages: 1-27 ; Kiel: Kiel Institute for the World Economy (IfW)

Classification and Topics

• Classification: Wirtschaft ; Empirical Studies of Trade ; Foreign Exchange ; Current Account Adjustment; Short-term Capital Movements ; Open Economy Macroeconomics
• Subject: exchange rate movements ; export market dynamics ; firm heterogeneity ; China

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Huang, Xiaobing
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2017

Further information

• DOI: doi:10.5018/economics-ejournal.ja.2017-23
• Handle: http://hdl.handle.net/10419/168035
• Last update: 10.03.2025, 11:43 AM CET