Do Exporters Respond to Both Tariffs and Nominal Exchange Rates? Evidence from Chinese Firm-Product Data

Zhe Chen and Yoshinori Kurokawa

Tsukuba Economics Working Papers from Faculty of Humanities and Social Sciences, University of Tsukuba

Abstract: Past evidence on exchange rates and exports implies that nominal exchange rates might not matter for the extensive margin of exports. Using Chinese firm-product data during 2000-2006, however, this paper finds that the effect of nominal exchange rates on exporter numbers is significant and even comparable with that of tariffs. The effects are larger for processing trade, low income destinations, and differentiated products. Financial constraints are a factor that significantly enlarges the effect of nominal exchange rates on exporter numbers.

Date: 2018-02, Revised 2021-03
New Economics Papers: this item is included in nep-cna, nep-int and nep-tra
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Journal Article: Do exporters respond to both tariffs and nominal exchange rates? Evidence from Chinese firm‐product data (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:tsu:tewpjp:2018-001

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