Determinants of Currency Invoicing in Japanese Exports: A firm-level analysis
AbstractCurrency 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.
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Bibliographic InfoPaper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 10034.
Length: 40 pages
Date of creation: Jun 2010
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-03 (All new papers)
- NEP-IFN-2010-07-03 (International Finance)
- NEP-INT-2010-07-03 (International Trade)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Japanâs rising yen and the decline of the US dollar
by Masaya Sakuragawa in East Asia Forum on 2011-10-01 12:00:26
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