Publication:
Exchange Rate Volatility, Financial Constraints, and Trade : Empirical Evidence from Chinese Firms

dc.contributor.author Heericourt, Jerome
dc.contributor.author Poncet, Sandra
dc.date.accessioned 2014-02-04T16:31:39Z
dc.date.available 2014-02-04T16:31:39Z
dc.date.issued 2013-10
dc.description.abstract This paper studies how firm-level export performance is affected by Real Exchange Rate (RER) volatility and investigates whether this effect depends on existing financial constraints. The empirical analysis relies on export data for more than 100,000 Chinese exporters over the 2000-6 period. The results confirm a trade-deterring effect of RER volatility. Firms' decision to begin exporting and the exported value decrease for destinations with higher exchange rate volatility; besides, this effect is magnified for financially vulnerable firms. As expected, financial development seems to dampen this negative impact, especially on the intensive margin of export. These results provide micro-founded evidence suggesting that the existence of well-developed financial markets allows firms to hedge exchange rate risk. The results also support a key role of financial constraints in determining the macro impact of RER volatility on real outcomes. en
dc.identifier http://documents.worldbank.org/curated/en/2013/10/18347947/exchange-rate-volatility-financial-constraints-trade-empirical-evidence-chinese-firms
dc.identifier.uri http://hdl.handle.net/10986/16855
dc.language English
dc.language.iso en_US
dc.publisher World Bank, Washington, DC
dc.relation.ispartofseries Policy Research Working Paper;No. 6638
dc.rights CC BY 3.0 IGO
dc.rights.holder World Bank
dc.rights.uri http://creativecommons.org/licenses/by/3.0/igo/
dc.subject ADJUSTMENT COSTS
dc.subject AMERICAN ECONOMIC REVIEW
dc.subject BANKING CRISES
dc.subject BARRIER
dc.subject BENCHMARK SPECIFICATION
dc.subject BILATERAL EXCHANGE RATE
dc.subject BILATERAL TRADE
dc.subject BOND
dc.subject BUDGET CONSTRAINT
dc.subject BUSINESS CYCLES
dc.subject CAPACITY BUILDING
dc.subject CASH FLOWS
dc.subject CENTRAL BANK
dc.subject CHINESE YUAN
dc.subject COLLATERAL
dc.subject COMMODITY
dc.subject COMMODITY PRICES
dc.subject COMMON CURRENCIES
dc.subject CONSUMER PRICE
dc.subject CONVERTIBILITY
dc.subject COUNTRY FIXED EFFECTS
dc.subject COVARIANCE MATRIX
dc.subject CREDIT CEILING
dc.subject CREDIT CONSTRAINT
dc.subject CREDIT CONSTRAINTS
dc.subject CREDIT MARKETS
dc.subject CREDIT RATIONING
dc.subject CURRENCY
dc.subject CURRENCY APPRECIATION
dc.subject CURRENCY CRISES
dc.subject CURRENCY DEPRECIATIONS
dc.subject CURRENCY UNION
dc.subject DEBT
dc.subject DEPENDENT VARIABLE
dc.subject DEPOSITS
dc.subject DEPRECIATING EXCHANGE RATE
dc.subject DEPRECIATIONS
dc.subject DERIVATIVE
dc.subject DESCRIPTIVE STATISTICS
dc.subject DEVELOPING COUNTRIES
dc.subject DEVELOPING COUNTRY
dc.subject DEVELOPING ECONOMIES
dc.subject DIVERSIFIED FIRMS
dc.subject DUMMY VARIABLE
dc.subject EARNINGS
dc.subject ECONOMIC DEVELOPMENTS
dc.subject ECONOMIC FLUCTUATIONS
dc.subject ECONOMIC INSTABILITY
dc.subject ECONOMIC PERFORMANCE
dc.subject ECONOMIC POLICY
dc.subject EFFECT OF VOLATILITY
dc.subject EMERGING MARKETS
dc.subject EURO
dc.subject EXCHANGE MARKET
dc.subject EXCHANGE RATE
dc.subject EXCHANGE RATE APPRECIATION
dc.subject EXCHANGE RATE CHANGES
dc.subject EXCHANGE RATE FLUCTUATIONS
dc.subject EXCHANGE RATE LEVEL
dc.subject EXCHANGE RATE MOVEMENTS
dc.subject EXCHANGE RATE POLICY
dc.subject EXCHANGE RATE REGIME
dc.subject EXCHANGE RATE RISK
dc.subject EXCHANGE RATE SYSTEM
dc.subject EXCHANGE RATE UNCERTAINTY
dc.subject EXCHANGE RATE VOLATILITY
dc.subject EXCHANGE RATES
dc.subject EXCHANGE-RATE
dc.subject EXPANSION OF EXPORTS
dc.subject EXPLANATORY VARIABLES
dc.subject EXPORT CAPACITY
dc.subject EXPORT GOODS
dc.subject EXPORT MARKET
dc.subject EXPORT MARKETS
dc.subject EXPORT PERFORMANCE
dc.subject EXPORT SHARE
dc.subject EXPORTER
dc.subject EXPORTERS
dc.subject EXPOSURE
dc.subject EXTERNAL DEBT
dc.subject EXTERNAL FINANCE
dc.subject EXTERNAL FINANCING
dc.subject FEDERAL RESERVE
dc.subject FEDERAL RESERVE SYSTEM
dc.subject FINANCIAL CONSTRAINTS
dc.subject FINANCIAL CRISIS
dc.subject FINANCIAL DATA
dc.subject FINANCIAL DEVELOPMENT
dc.subject FINANCIAL FACTORS
dc.subject FINANCIAL LIBERALIZATION
dc.subject FINANCIAL MARKETS
dc.subject FINANCIAL SECTOR
dc.subject FINANCIAL STUDIES
dc.subject FINANCIAL SYSTEM
dc.subject FINANCIAL SYSTEMS
dc.subject FINANCIAL VULNERABILITY
dc.subject FIRM PERFORMANCE
dc.subject FIXED ASSETS
dc.subject FIXED PEG
dc.subject FIXED PEGS
dc.subject FLOATING REGIME
dc.subject FOREIGN CURRENCY
dc.subject FOREIGN DEMAND
dc.subject FOREIGN DIRECT INVESTMENT
dc.subject FOREIGN INCOME
dc.subject FORWARD EXCHANGE
dc.subject HIGHER VOLATILITY
dc.subject HOLDING
dc.subject IMPACT OF VOLATILITY
dc.subject IMPORT PRICE
dc.subject IMPORTS
dc.subject INCOME
dc.subject INCOME VOLATILITY
dc.subject INDUSTRIAL COUNTRIES
dc.subject INTANGIBLE
dc.subject INTANGIBLE ASSETS
dc.subject INTERACTION TERM
dc.subject INTERNAL FINANCE
dc.subject INTERNATIONAL BANK
dc.subject INTERNATIONAL ECONOMICS
dc.subject INTERNATIONAL FINANCE
dc.subject INTERNATIONAL FINANCIAL STATISTICS
dc.subject INTERNATIONAL MONETARY FUND
dc.subject INTERNATIONAL TRADE
dc.subject INVESTMENT DYNAMICS
dc.subject INVESTMENT EXPENDITURES
dc.subject LIABILITY
dc.subject LIBERALIZATION
dc.subject LINK BETWEEN VOLATILITY
dc.subject LIQUIDITY
dc.subject LIQUIDITY CONSTRAINTS
dc.subject LOCAL CURRENCY
dc.subject LOCAL ECONOMY
dc.subject LONG-TERM INVESTMENT
dc.subject MACROECONOMIC VARIABLES
dc.subject MACROECONOMICS
dc.subject MARKET CONDITIONS
dc.subject MARKET SIZE
dc.subject MEASURE OF VOLATILITY
dc.subject MICRO DATA
dc.subject MISALIGNMENT
dc.subject MONETARY ECONOMICS
dc.subject MONETARY POLICY
dc.subject NEW MARKETS
dc.subject NOMINAL EXCHANGE RATE
dc.subject NOMINAL EXCHANGE RATES
dc.subject NONLINEAR EFFECTS
dc.subject OPEN ECONOMIES
dc.subject OTHER CURRENCIES
dc.subject OUTPUT
dc.subject OWNERSHIP STRUCTURE
dc.subject POSITIVE COEFFICIENT
dc.subject PRICE INDEX
dc.subject PRICE VOLATILITY
dc.subject PRIVATE INVESTMENT
dc.subject RATE OF INVESTMENT
dc.subject RATIONING
dc.subject REAL DEPRECIATION
dc.subject REAL EFFECTIVE EXCHANGE RATE
dc.subject REAL EXCHANGE RATE
dc.subject REAL EXCHANGE RATES
dc.subject REVIEW OF ECONOMICS
dc.subject ROBUSTNESS CHECK
dc.subject ROBUSTNESS CHECKS
dc.subject SHARE OF CAPITAL
dc.subject STANDARD DEVIATION
dc.subject STANDARD DEVIATIONS
dc.subject STANDARD ERRORS
dc.subject SUPPLY OF CREDIT
dc.subject TOTAL CREDIT
dc.subject TOTAL EXPORT
dc.subject TOTAL IMPORT
dc.subject TOTAL IMPORTS
dc.subject TRADE DATA
dc.subject TRADE LIBERALIZATION
dc.subject TRADE PERFORMANCE
dc.subject TRADING
dc.subject UNCERTAINTY
dc.subject VARIABLE COSTS
dc.subject VOLATILE EXCHANGE RATES
dc.subject VOLATILITY
dc.subject WEIGHTS
dc.subject WORLD DEVELOPMENT INDICATORS
dc.title Exchange Rate Volatility, Financial Constraints, and Trade : Empirical Evidence from Chinese Firms en
dspace.entity.type Publication
okr.date.disclosure 2013-10-01
okr.doctype Publications & Research :: Policy Research Working Paper
okr.doctype Publications & Research
okr.docurl http://documents.worldbank.org/curated/en/2013/10/18347947/exchange-rate-volatility-financial-constraints-trade-empirical-evidence-chinese-firms
okr.globalpractice Macroeconomics and Fiscal Management
okr.globalpractice Finance and Markets
okr.globalpractice Trade and Competitiveness
okr.identifier.doi 10.1596/1813-9450-6638
okr.identifier.externaldocumentum 000158349_20131004092034
okr.identifier.internaldocumentum 18347947
okr.identifier.report WPS6638
okr.language.supported en
okr.pdfurl http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/10/04/000158349_20131004092034/Rendered/PDF/WPS6638.pdf en
okr.region.administrative East Asia and Pacific
okr.region.country China
okr.topic Fiscal and Monetary Policy
okr.topic Finance and Financial Sector Development :: Currencies and Exchange Rates
okr.topic Private Sector Development :: Emerging Markets
okr.topic Finance and Financial Sector Development :: Debt Markets
okr.topic Macroeconomics and Economic Growth :: Economic Conditions and Volatility
okr.unit Partnerships, Capacity Building Unit, Development Economics Vice Presidency
okr.volume 1 of 1
relation.isSeriesOfPublication 26e071dc-b0bf-409c-b982-df2970295c87
Files
Original bundle
Now showing 1 - 2 of 2
Thumbnail Image
Name:
English PDF
Size:
447.04 KB
Format:
Adobe Portable Document Format
Description:
No Thumbnail Available
Name:
English Text
Size:
137.6 KB
Format:
Plain Text
Description:
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.71 KB
Format:
Plain Text
Description: