Impact of exchange rate movements on exports: An analysis of Indian non-financial sector firms |
| |
| Institution: | 1. Department of Economics and Finance, City University of Hong Kong, Hong Kong;2. Institute for Financial Management and Research (IFMR), 24 Kothari Road, Chennai 600017, India;1. Central University of Finance and Economics, China;2. Longyan Municipal Center Branch of the People’s Bank of China, China;3. East China Jiaotong University, China;1. The Center for Research on International Economics, The University of Wisconsin-Milwaukee, USA;2. Department of Economics, The University of Wisconsin-Milwaukee, USA;3. Department of Finance and Banking, University of Malaya, Malaysia |
| |
| Abstract: | We explore the real effective exchange rate (REER) effects on the share of exports of Indian non-financial sector firms for the period 2000–2010. Our empirical analysis reveals that, on average, there has been a strong and significant negative impact from currency appreciation and currency volatility on Indian firms' export shares. Labor costs are found to intensify the exchange rate effects on trade. Further, there is evidence that the Indian firms considered here respond asymmetrically to exchange rates. For instance, the REER change effect is more likely to be driven by a negative appreciation effect than a depreciation effect. Also, Indian firms that have smaller export shares tend to have a stronger response to both REER change and volatility. Compared with those exporting goods, firms that export services are more affected by exchange rate fluctuations. The findings, especially those on asymmetric responses, have important policy implications. |
| |
| Keywords: | Exchange rate fluctuations Firm-level export shares Asymmetric effects Services exports |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
