Financial Market Imperfections and the Impact of Exchange Rate Movements on Exports

Nicolas Berman () and Antoine Berthou ()

Review of International Economics, 2009, vol. 17, issue 1, pages 103-120

Abstract: This paper analyzes empirically the role of financial market imperfections in the way countries' exports react to a currency depreciation. Using quarterly data for 27 developed and developing countries over the period 1990-2005, we find that the impact of a depreciation on exports will be less positive-or even negative-for a country if: (i) firms borrow in foreign currency; (ii) they are credit constrained; (iii) they are specialized in industries that require more external capital; (iv) the magnitude of depreciation or devaluation is large. This last result emphasizes the existence of a nonlinear relationship between an exchange rate depreciation and the reaction of a country's exports when financial imperfections are observed. This offers a new explanation for the consequences of recent currency crises in middle-income countries. Copyright © 2009 The Authors. Journal compilation © Blackwell Publishing Ltd 2009.

Date: 2009

Downloads: (external link)
http://www.blackwell-synergy.com/links/doi/10.1111/j.1467-9396.2008.00781.x link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Financial market imperfections and the impact of exchange rate movements on exports (2006)
Working Paper: Financial Market Imperfections and the impact of exchange rate movements on exports (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:bla:reviec:v:17:y:2009:i:1:p:103-120

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0965-7576

Access Statistics for this article

Review of International Economics is edited by E. Kwan Choi

More articles in Review of International Economics from Blackwell Publishing
Series data maintained by Christopher F. Baum ().