Exchange rate expectations and exports: Firm‐level evidence from China

Author:

Bao Xiaohua1,Huang Hailiang2,Qiu Larry D.3,Wang Xiaozhuo4ORCID

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

Publisher

Wiley

Subject

Development,Geography, Planning and Development

Cited by 1 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

1. Introduction to the special issue “China and the global economy”;Review of International Economics;2024-01-16

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