Impact of exchange rate movements on exports: An analysis of Indian non-financial sector firms
Yin-Wong Cheung and
Rajeswari Sengupta ()
Journal of International Money and Finance, 2013, vol. 39, issue C, 231-245
We explore the real effective exchange rate (REER) effects on the share of exports of Indian non-financial sector firms for the period 2000–2010. Our empirical analysis reveals that, on average, there has been a strong and significant negative impact from currency appreciation and currency volatility on Indian firms' export shares. Labor costs are found to intensify the exchange rate effects on trade. Further, there is evidence that the Indian firms considered here respond asymmetrically to exchange rates. For instance, the REER change effect is more likely to be driven by a negative appreciation effect than a depreciation effect. Also, Indian firms that have smaller export shares tend to have a stronger response to both REER change and volatility. Compared with those exporting goods, firms that export services are more affected by exchange rate fluctuations. The findings, especially those on asymmetric responses, have important policy implications.
Keywords: Exchange rate fluctuations; Firm-level export shares; Asymmetric effects; Services exports (search for similar items in EconPapers)
JEL-codes: F1 F4 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (61) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Impact of Exchange Rate Movements on Exports: An Analysis of Indian Non-Financial Sector Firms (2013)
Working Paper: Impact of exchange rate move-ments on exports: An analysis of Indian non-financial sector firms (2013)
Working Paper: Impact of exchange rate movements on exports: an analysis of Indian non-financial sector firms (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:39:y:2013:i:c:p:231-245
Access Statistics for this article
Journal of International Money and Finance is currently edited by J. R. Lothian
More articles in Journal of International Money and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().