The impact of exchange rate movements on multi-product firms' export performance: Evidence from China

Jiayun Xu, Qilin Mao and Jiadong Tong

China Economic Review, 2016, vol. 39, issue C, 46-62

Abstract: This paper investigates the effects of RMB exchange rate movements on Chinese multi-product firms' export behavior using China's firm-level micro data and highly disaggregated customs data over 2000–2007. We find that real appreciation of RMB exerts negative effects on Chinese multi-product firms' export prices and export quantities, and the effects are significantly different across firms with different productivity as well as the product ladder within multi-product firms. In addition, we document that real appreciation of RMB narrows multi-product firms' export scope and induces firms to skew their export sales towards the best performing products. Finally, the paper explores the effects of RMB exchange rate movements on firms' export duration, and shows that real appreciation of RMB lengthens the export duration of core products but shortens the export duration of non-core products.

Keywords: RMB exchange rate; Product ladder; Product scope; Export duration (search for similar items in EconPapers)
JEL-codes: C33 D21 F10 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:39:y:2016:i:c:p:46-62

DOI: 10.1016/j.chieco.2016.04.003

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