Affiliation:
1. College of Business Shanghai University of Finance and Economics Shanghai China
2. School of Information Management & Engineering Shanghai Univerity of Finance and Economics Shanghai China
3. The Department of Economics Lingnan University New Territory Hong Kong
4. School of Economics and Management Shanghai University of Political Science and Law Shanghai China
Abstract
AbstractThe notion that the exchange rate affects exports is well understood. However, whether exporters respond to the expectations of the exchange rate is unknown. Hence, in this study, we construct a measure of exchange rate expectations based on news articles from the Factiva database. We use machine learning to identify and classify news articles about the appreciation of the renminbi (RMB, Chinese currency). Our empirical estimation shows that from 2000 to 2006, Chinese firms reduced their exports in response to a higher expectation of RMB appreciation. They switched their sales from export to domestic markets. The responses are larger in low‐productivity firms, state‐owned enterprises, processing trade, and final goods trade.
Funder
National Office for Philosophy and Social Sciences
Shanghai Municipal Education Commission
Subject
Development,Geography, Planning and Development
Cited by
1 articles.
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