Impact of Chinese Renminbi on Korean Exports: Does Quality Matter?

Jihyun Eum ()
Additional contact information
Jihyun Eum: Economic Research Institute, Bank of Korea

No 2019-24, Working Papers from Economic Research Institute, Bank of Korea

Abstract: This paper examines the impact of changes in the Chinese exchange rate on Korean exports taking into consideration the characteristics of the exported products. In this paper, we consider the degree of vertical product differentiation to be one of the causes that ease the negative spillover effects from the depreciation of the Chinese renminbi on Korea¡¯s export performance. Using import data from OECD member countries from 2002 to 2014, we find that Korea's exports to OECD countries of the products that have a greater degree of competition fall more as the renminbi depreciates. In addition, once quality differences between Korea and China are considered in the estimation, the negative impact from the depreciation of the Chinese renminbi turn out to be negligible. Due to a small response to the depreciation of the Chinese renminbi for a high quality good, the negative impact diminishes in the markets and the products where Korean goods show a relatively higher quality than those of China.

Keywords: Export competition; Exchange rate pass-through; Quality; Product differentiation (search for similar items in EconPapers)
JEL-codes: F10 F11 F13 F14 F31 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2019-09-25
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://papers.bok.or.kr/RePEc_attach/wpaper/english/wp-2019-24.pdf Working Paper, 2019 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bok:wpaper:1924

Access Statistics for this paper

More papers in Working Papers from Economic Research Institute, Bank of Korea Contact information at EDIRC.
Bibliographic data for series maintained by Economic Research Institute ().