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Determinants of Currency Invoicing in Japanese Exports: A firm-level analysis

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  • ITO Takatoshi
  • KOIBUCHI Satoshi
  • SATO Kiyotaka
  • SHIMIZU Junko

Abstract

Currency invoicing in Japanese exports has two puzzling patterns concerning an excessively small share of yen invoicing: one is a strong tendency of Japanese firms to choose the importer's currency invoicing in exports to developed countries, and the other is the prevalence of U.S. dollar invoicing in Japanese exports to East Asia even though Japanese firms have built a regional production network over two decades. To address the puzzles, we propose new possible determinants of currency invoicing at a firm-level, based on an interview analysis with Japanese representative exporting firms, and then empirically test them by probit estimation using the unique dataset on the firms' currency invoicing choice by destination. Our novel findings suggest that a surprisingly low share of yen invoicing in Japanese exports even in the 2000s is attributed not only to the growing intra-firm trade through active overseas operations of Japanese firms but also to the unique production/trade structure in Asia mainly established by Japanese electronics companies.

Suggested Citation

  • ITO Takatoshi & KOIBUCHI Satoshi & SATO Kiyotaka & SHIMIZU Junko, 2010. "Determinants of Currency Invoicing in Japanese Exports: A firm-level analysis," Discussion papers 10034, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:10034
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    References listed on IDEAS

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    1. Japan’s rising yen and the decline of the US dollar
      by Masaya Sakuragawa in East Asia Forum on 2011-10-01 17:00:26

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    Cited by:

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    3. ITO Takatoshi & KOIBUCHI Satoshi & SATO Kiyotaka & SHIMIZU Junko & YOSHIMI Taiyo, 2021. "The Dollar, the Yen, or the RMB? A Survey Data Analysis of Invoicing Currencies among Japanese Overseas Subsidiaries," Discussion papers 21016, Research Institute of Economy, Trade and Industry (RIETI).
    4. Maria V. Sokolova, 2015. "Strategic Currency Choice in International Trade," CESifo Working Paper Series 5574, CESifo.

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