Exchange Rate Movements, Firm-Level Exports and Heterogeneity
Antoine Berthou () and
Emmanuel Dhyne ()
Working papers from Banque de France
This paper provides an estimation of the reaction of firm-level exports consecutive to real exchange rate movements, the exchange rate elasticity of exports. Following recent theoretical works emphasizing the role played by firm heterogeneity, we test in particular how the exchange rate elasticity may be affected by firm-level productivity, and how the heterogeneous reaction of different firms may contribute to shape the aggregate reaction of countries' exports. The analysis relies on a unique cross-country micro-based dataset of exporters available for 11 European countries (2001-2011), which details in particular information about firms' productivity and export performance. Our results show that while the average exchange rate elasticity across firms is quite weak, it is also highly heterogeneous. The least productive firms within each country and sector tend to react more to real exchange rate movements than the most productive firms. This weak reaction of highly productive and large exporters tends to reduce the macroeconomic exchangerate elasticity in all countries. Cross-country differences in the shape of the productivity distribution among exporters have a strong influence on the macroeconomic exchange rate elasticity: countries populated with a higher density of low productive firms tend to respond more to exchange rate movements in terms of aggregate exports than countries populated with highlyproductive exporters.
Keywords: Firm-level exports; heterogeneity; exchange rates movements. (search for similar items in EconPapers)
JEL-codes: F12 F14 F31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-int and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
https://publications.banque-france.fr/sites/defaul ... ocuments/wp660_0.pdf (application/pdf)
Working Paper: Exchange rate movements,firm-level exports and heterogeneity (2018)
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:bfr:banfra:660
Access Statistics for this paper
More papers in Working papers from Banque de France Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS. Contact information at EDIRC.
Bibliographic data for series maintained by Michael brassart ().