A Firm-Level Reappraisal of Real Exchange Rate Undervaluation in China s Agricultural Exports and Growth
No 276987, 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia from International Association of Agricultural Economists
Matching firm- and country-level data with a panel dataset of China s agricultural exports at the firm-product-country-level, a measure of firm-level exposure to exchange rate undervaluation has been proposed based on estimates of the bilateral undervaluation of yuan versus other currencies. Empirical models find that a firm s agricultural exports significantly and positively increase with its exposure to undervaluation. The result remains robust to alternative sample selections, measurement choices, and model specifications. The elasticity, however, differs across firms for their productivity, financial constraint, ownership, trade mode, and subsidy status. With the mediation role of increased exports, the undervaluation exposure further accelerates the firm-level growth in both productivity and scale according to the path analysis. This mediation effect takes almost a half of the acceleration effect of undervaluation on labor productivity and employment growth. It takes even the entire effect as to the growth of total factor productivity, sales, value added, and capital stock. Acknowledgement :
Keywords: Financial; Economics (search for similar items in EconPapers)
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