Currency Invoicing of U.S. Imports

Shabtai Donnenfeld and Alfred Haug ()
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Alfred Haug: York University, Canada

Working Papers from York University, Department of Economics

Abstract: This paper provides an explanation for the choice of currency of invoice of exports to the U.S. We find an empirical relationship between the riskiness of the exchange rate and the fraction of imports invoiced in the importer¡¯s currency, the exporter¡¯s currency, and a third country currency. The higher the volatility of the exchange rate, the larger is the fraction of imports invoiced in the importer¡¯s currency. Consequently, the fraction of invoicing in the exporter¡¯s or a third country currency is inversely related to the volatility of the exchange rate.

JEL-codes: F14 F31 (search for similar items in EconPapers)
Date: 2001-11, Revised 2002-04
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http://dept.econ.yorku.ca/research/workingPapers/w ... nenfeld_Haug_usa.pdf Revised version, 2002

Related works:
Journal Article: Currency invoicing of US imports (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:yca:wpaper:2002_11

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