 Micro, macro, and strategic forces in international trade invoicing: Synthesis and novel patternsLinda Goldberg and Cédric Tille Journal of International Economics, 2016, vol. 102, issue C, 173-187 Abstract: The currency used in invoicing international trade matters for the impact of exchange rate movements in the presence of price rigidities. We present stylized facts on specific macro, micro and other drivers of invoicing based on 45 million Canadian import transactions. Four main results emerge. First, a large share of invoicing takes place in “vehicle” currencies that are neither the exporters nor the importers. Second, we document a novel link between the size of individual transactions and invoicing. Both the absolute value of a transaction and its relative size at the industry level matter. Third, the exchange rate plays an important role along three dimensions: exchange rate volatility, exchange rate regime, and currency transaction volumes in foreign exchange markets. Finally, we confirm the role of the market share of an exporting country at the industry level. Our results identify the most salient patterns in order to guide further developments in theoretical models of invoicing currency choice. Keywords: Invoicing currency; Strategy; Vehicle currency; Pass-through; International trade (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:102:y:2016:i:c:p:173-187 DOI: 10.1016/j.jinteco.2016.07.004 Access Statistics for this article Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and RodrÃguez-Clare, Andrés More articles in Journal of International Economics from Elsevier |
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