The Effect of the Real Exchange Rate on Technological Progress. An Application to the Textile Industry in China

Laurent Cortese () and Ping Hua ()
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Laurent Cortese: Centre d'Etudes et de Recherches sur le Développement International(CERDI)
Ping Hua: Centre National de la Recherche Scientifique(CNRS)

No 200207, Working Papers from CERDI

Abstract: Technological progress in the textile and clothing sectors is measured for 26 Chinese provinces using panel data by sector and the stochastic frontier method. The impact of the real exchange rate on this technological progress, as well as its transmission channels, are respectively estimated. The technological progress is positive for both sectors, and the real depreciation of the Chinese currency contributes to this improvement. Due to the dominant non state-owned enterprises in the clothing sector, both technological progress and the effect of real depreciation on the increase of technological progress are twice as high as in the textile sector. The principal transmission channel of the impact of the exchange rate on technological progress is through imported equipment, but not through openness.

Keywords: Real exchange rate; Technological progress; Stochastic frontier method; China. (search for similar items in EconPapers)
Pages: 24
Date: 2002
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Citations: View citations in EconPapers (4)

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