Exchange rate regimes, trade in raw materials and exporters behavior: Evidence from some Small Island Developing States (SIDS)

Laurent Didier

Economics Bulletin, 2020, vol. 40, issue 4, 2894-2919

Abstract: I investigate the effects of de facto exchange rate regimes (ERRs) on exporters behavior in the particular case of two Small Island Developing States (Dominican Republic and Mauritius). We know that exchange rates are an important indicator of competitiveness for firms in international economic relations and the choice of ERR is heavily crucial for SIDS due to their specific situation. Based on a structural gravity model in panel over the period 1997-2014 at the firm-level, I find statistically significant results of de facto ERRs on some exporters behavior for firms specialised in raw materials. The results underline the presence of heterogeneous effects across countries and products on the exporting firms performance.

Keywords: de facto exchange rate regimes; exporters behavior; SIDS; gravity (search for similar items in EconPapers)
JEL-codes: F1 F3 (search for similar items in EconPapers)
Date: 2020-10-30
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