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Exchange Rates and Firm Exports: The Role of Foreign Ownership and Subsidiaries

Author

Listed:
  • Choi, Hyelin

    (Korea Institute for International Economic Policy)

  • Kim, Hyo Sang

    (Korea Institute for International Economic Policy)

Abstract

Exchange rates have been changed unusually large these days. From 2011 to 2016, the Euro and the Japanese Yen have depreciated against the US Dollar by more than 25 percent. According to a theory, since competitively valued exchange rate helps to boost export growth, we should have observed a substantial increase in export in the EU and Japan. However, the effectiveness of the exchange rates on exports appears to be weak across countries. This anomaly is one of the central puzzles in international macroeconomics: why large movements in the exchange rate have modest effects on the aggregate variables such as import prices, consumer prices, and quantity of exports.

Suggested Citation

  • Choi, Hyelin & Kim, Hyo Sang, 2018. "Exchange Rates and Firm Exports: The Role of Foreign Ownership and Subsidiaries," Working Papers 18-3, Korea Institute for International Economic Policy.
    • Handle: RePEc:ris:kiepwp:2018_003
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    Citations

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    Cited by:

    1. Sei‐Wan Kim & Moon Jung Choi, 2020. "Does Trade Elasticity Vary Across Regimes? New Evidence from Korean Exports, Incorporating Regime Changes," Asian Economic Journal, East Asian Economic Association, vol. 34(4), pages 379-403, December.

    More about this item

    Keywords

    Exchange Rate Elasticity; Firm Export; Production Linkage; Global Value Chains;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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