TY - CEPII
A1 - Jérôme Héricourt
A1 - Sandra Poncet
TI - Exchange Rate Volatility, Financial Constraints and Trade: Empirical Evidence from Chinese Firms
IS - 2012-35
T3 - Working Papers
KW - Exchange rate volatility
KW - financial development
KW - exports
N2 - This paper studies how firm-level export performance is affected by RER volatility and investigates whether this effect depends on existing financial constraints. Our empirical analysis relies on export data for more than 100,000 Chinese exporters over the period 2000-2006. We confirm a trade-deterring effect of RER volatility. We find that firms tend to export less and fewer products to destinations with higher exchange rate volatility and that this effect is magnified for financially vulnerable firms. As expected, financial development does seem to dampen this negative impact, especially on the intensive margin of export.
ER -