Further processing options
available via online resource

Renminbi rising?: exporters' response to China's currency internationalization

Saved in:

Authors and Corporations: Chowdhry, Sonali (Author)
Type of Resource: E-Book
Language: English
published:
Berlin DIW Berlin, German Institute for Economic Research 2024
Series: Deutsches Institut für Wirtschaftsforschung: Discussion papers ; 2085
Subjects:
Firm heterogeneity
Invoicing currency
Trade transactions
China
Graue Literatur
Firm heterogeneity
Invoicing currency
Trade transactions
China
Source: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
Description
Summary: This paper investigates the heterogeneous responses of exporters to policy reforms undertaken by the People’s Bank of China to internationalize the Renminbi (RMB). Using detailed customs data from France for the initial years of these reforms (2011-2017), it documents several novel stylized facts on RMB adoption, highlighting both the growth and extreme skewness in RMB’s uptake across firms and varieties. It further examines various mechanisms underpinning self-selection into RMB and proposes a novel channel that strongly predicts RMB adoption. This channel exploits information on firms’ invoicing currency strategies in existing markets and is observed to be a valid instrument for RMB adoption. Leveraging this new instrument, the paper shows that invoicing in RMB significantly boosted exports for varieties sold to China. Overall, the findings suggest that early RMB adoption, although limited across firms, provided an important competitive edge when exporting to China.
Physical Description: 1 Online-Ressource (circa 36 Seiten); Illustrationen