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

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dc.contributor.authorHeericourt, Jerome
dc.contributor.authorPoncet, Sandra
dc.date.accessioned2014-02-04T16:31:39Z
dc.date.available2014-02-04T16:31:39Z
dc.date.issued2013-10
dc.description.abstractThis 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.identifierhttp://documents.worldbank.org/curated/en/2013/10/18347947/exchange-rate-volatility-financial-constraints-trade-empirical-evidence-chinese-firms
dc.identifier.doi10.1596/1813-9450-6638
dc.identifier.urihttps://hdl.handle.net/10986/16855
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 6638
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectADJUSTMENT COSTS
dc.subjectAMERICAN ECONOMIC REVIEW
dc.subjectBANKING CRISES
dc.subjectBARRIER
dc.subjectBENCHMARK SPECIFICATION
dc.subjectBILATERAL EXCHANGE RATE
dc.subjectBILATERAL TRADE
dc.subjectBOND
dc.subjectBUDGET CONSTRAINT
dc.subjectBUSINESS CYCLES
dc.subjectCAPACITY BUILDING
dc.subjectCASH FLOWS
dc.subjectCENTRAL BANK
dc.subjectCHINESE YUAN
dc.subjectCOLLATERAL
dc.subjectCOMMODITY
dc.subjectCOMMODITY PRICES
dc.subjectCOMMON CURRENCIES
dc.subjectCONSUMER PRICE
dc.subjectCONVERTIBILITY
dc.subjectCOUNTRY FIXED EFFECTS
dc.subjectCOVARIANCE MATRIX
dc.subjectCREDIT CEILING
dc.subjectCREDIT CONSTRAINT
dc.subjectCREDIT CONSTRAINTS
dc.subjectCREDIT MARKETS
dc.subjectCREDIT RATIONING
dc.subjectCURRENCY
dc.subjectCURRENCY APPRECIATION
dc.subjectCURRENCY CRISES
dc.subjectCURRENCY DEPRECIATIONS
dc.subjectCURRENCY UNION
dc.subjectDEBT
dc.subjectDEPENDENT VARIABLE
dc.subjectDEPOSITS
dc.subjectDEPRECIATING EXCHANGE RATE
dc.subjectDEPRECIATIONS
dc.subjectDERIVATIVE
dc.subjectDESCRIPTIVE STATISTICS
dc.subjectDEVELOPING COUNTRIES
dc.subjectDEVELOPING COUNTRY
dc.subjectDEVELOPING ECONOMIES
dc.subjectDIVERSIFIED FIRMS
dc.subjectDUMMY VARIABLE
dc.subjectEARNINGS
dc.subjectECONOMIC DEVELOPMENTS
dc.subjectECONOMIC FLUCTUATIONS
dc.subjectECONOMIC INSTABILITY
dc.subjectECONOMIC PERFORMANCE
dc.subjectECONOMIC POLICY
dc.subjectEFFECT OF VOLATILITY
dc.subjectEMERGING MARKETS
dc.subjectEURO
dc.subjectEXCHANGE MARKET
dc.subjectEXCHANGE RATE
dc.subjectEXCHANGE RATE APPRECIATION
dc.subjectEXCHANGE RATE CHANGES
dc.subjectEXCHANGE RATE FLUCTUATIONS
dc.subjectEXCHANGE RATE LEVEL
dc.subjectEXCHANGE RATE MOVEMENTS
dc.subjectEXCHANGE RATE POLICY
dc.subjectEXCHANGE RATE REGIME
dc.subjectEXCHANGE RATE RISK
dc.subjectEXCHANGE RATE SYSTEM
dc.subjectEXCHANGE RATE UNCERTAINTY
dc.subjectEXCHANGE RATE VOLATILITY
dc.subjectEXCHANGE RATES
dc.subjectEXCHANGE-RATE
dc.subjectEXPANSION OF EXPORTS
dc.subjectEXPLANATORY VARIABLES
dc.subjectEXPORT CAPACITY
dc.subjectEXPORT GOODS
dc.subjectEXPORT MARKET
dc.subjectEXPORT MARKETS
dc.subjectEXPORT PERFORMANCE
dc.subjectEXPORT SHARE
dc.subjectEXPORTER
dc.subjectEXPORTERS
dc.subjectEXPOSURE
dc.subjectEXTERNAL DEBT
dc.subjectEXTERNAL FINANCE
dc.subjectEXTERNAL FINANCING
dc.subjectFEDERAL RESERVE
dc.subjectFEDERAL RESERVE SYSTEM
dc.subjectFINANCIAL CONSTRAINTS
dc.subjectFINANCIAL CRISIS
dc.subjectFINANCIAL DATA
dc.subjectFINANCIAL DEVELOPMENT
dc.subjectFINANCIAL FACTORS
dc.subjectFINANCIAL LIBERALIZATION
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL SECTOR
dc.subjectFINANCIAL STUDIES
dc.subjectFINANCIAL SYSTEM
dc.subjectFINANCIAL SYSTEMS
dc.subjectFINANCIAL VULNERABILITY
dc.subjectFIRM PERFORMANCE
dc.subjectFIXED ASSETS
dc.subjectFIXED PEG
dc.subjectFIXED PEGS
dc.subjectFLOATING REGIME
dc.subjectFOREIGN CURRENCY
dc.subjectFOREIGN DEMAND
dc.subjectFOREIGN DIRECT INVESTMENT
dc.subjectFOREIGN INCOME
dc.subjectFORWARD EXCHANGE
dc.subjectHIGHER VOLATILITY
dc.subjectHOLDING
dc.subjectIMPACT OF VOLATILITY
dc.subjectIMPORT PRICE
dc.subjectIMPORTS
dc.subjectINCOME
dc.subjectINCOME VOLATILITY
dc.subjectINDUSTRIAL COUNTRIES
dc.subjectINTANGIBLE
dc.subjectINTANGIBLE ASSETS
dc.subjectINTERACTION TERM
dc.subjectINTERNAL FINANCE
dc.subjectINTERNATIONAL BANK
dc.subjectINTERNATIONAL ECONOMICS
dc.subjectINTERNATIONAL FINANCE
dc.subjectINTERNATIONAL FINANCIAL STATISTICS
dc.subjectINTERNATIONAL MONETARY FUND
dc.subjectINTERNATIONAL TRADE
dc.subjectINVESTMENT DYNAMICS
dc.subjectINVESTMENT EXPENDITURES
dc.subjectLIABILITY
dc.subjectLIBERALIZATION
dc.subjectLINK BETWEEN VOLATILITY
dc.subjectLIQUIDITY
dc.subjectLIQUIDITY CONSTRAINTS
dc.subjectLOCAL CURRENCY
dc.subjectLOCAL ECONOMY
dc.subjectLONG-TERM INVESTMENT
dc.subjectMACROECONOMIC VARIABLES
dc.subjectMACROECONOMICS
dc.subjectMARKET CONDITIONS
dc.subjectMARKET SIZE
dc.subjectMEASURE OF VOLATILITY
dc.subjectMICRO DATA
dc.subjectMISALIGNMENT
dc.subjectMONETARY ECONOMICS
dc.subjectMONETARY POLICY
dc.subjectNEW MARKETS
dc.subjectNOMINAL EXCHANGE RATE
dc.subjectNOMINAL EXCHANGE RATES
dc.subjectNONLINEAR EFFECTS
dc.subjectOPEN ECONOMIES
dc.subjectOTHER CURRENCIES
dc.subjectOUTPUT
dc.subjectOWNERSHIP STRUCTURE
dc.subjectPOSITIVE COEFFICIENT
dc.subjectPRICE INDEX
dc.subjectPRICE VOLATILITY
dc.subjectPRIVATE INVESTMENT
dc.subjectRATE OF INVESTMENT
dc.subjectRATIONING
dc.subjectREAL DEPRECIATION
dc.subjectREAL EFFECTIVE EXCHANGE RATE
dc.subjectREAL EXCHANGE RATE
dc.subjectREAL EXCHANGE RATES
dc.subjectREVIEW OF ECONOMICS
dc.subjectROBUSTNESS CHECK
dc.subjectROBUSTNESS CHECKS
dc.subjectSHARE OF CAPITAL
dc.subjectSTANDARD DEVIATION
dc.subjectSTANDARD DEVIATIONS
dc.subjectSTANDARD ERRORS
dc.subjectSUPPLY OF CREDIT
dc.subjectTOTAL CREDIT
dc.subjectTOTAL EXPORT
dc.subjectTOTAL IMPORT
dc.subjectTOTAL IMPORTS
dc.subjectTRADE DATA
dc.subjectTRADE LIBERALIZATION
dc.subjectTRADE PERFORMANCE
dc.subjectTRADING
dc.subjectUNCERTAINTY
dc.subjectVARIABLE COSTS
dc.subjectVOLATILE EXCHANGE RATES
dc.subjectVOLATILITY
dc.subjectWEIGHTS
dc.subjectWORLD DEVELOPMENT INDICATORS
dc.titleExchange Rate Volatility, Financial Constraints, and Trade : Empirical Evidence from Chinese Firmsen
dspace.entity.typePublication
okr.crossref.titleExchange Rate Volatility, Financial Constraints, and Trade: Empirical Evidence from Chinese Firms
okr.date.disclosure2013-10-01
okr.date.doiregistration2025-04-10T11:46:19.748555Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2013/10/18347947/exchange-rate-volatility-financial-constraints-trade-empirical-evidence-chinese-firms
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeFinance and Markets
okr.globalpracticeTrade and Competitiveness
okr.guid788831468241446849
okr.identifier.doi10.1596/1813-9450-6638
okr.identifier.externaldocumentum000158349_20131004092034
okr.identifier.internaldocumentum18347947
okr.identifier.reportWPS6638
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/10/04/000158349_20131004092034/Rendered/PDF/WPS6638.pdfen
okr.region.administrativeEast Asia and Pacific
okr.region.countryChina
okr.topicFiscal and Monetary Policy
okr.topicFinance and Financial Sector Development::Currencies and Exchange Rates
okr.topicPrivate Sector Development::Emerging Markets
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicMacroeconomics and Economic Growth::Economic Conditions and Volatility
okr.unitPartnerships, Capacity Building Unit, Development Economics Vice Presidency
okr.volume1 of 1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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