Exchange Rate Movements and Exporter Profitability: Empirical Evidence from Chinese Manufacturing Sectors

Zhonghua Liang and Miaojie Yu

China Economic Journal, 2014, vol. 7, issue 2, 214-220

Abstract: Most products exported by Chinese manufacturing firms are characterized by high labor-intensity and low markup. Renminbi (RMB) appreciation undoubtedly worsens this situation as exporters have to pay RMB-denominated wages and charge dollar-denominated prices. This paper studies the correlation between exchange rate movements and the profitability of exporters. We find significant negative effects of RMB appreciation on the profitability of exporters.

Date: 2014
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DOI: 10.1080/17538963.2014.928971

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