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Do exporters respond to both tariffs and nominal exchange rates? Evidence from Chinese firm‐product data

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  • Zhe Chen
  • Yoshinori Kurokawa

Abstract

Past evidence on exchange rates and exports implies that nominal exchange rates might not matter for the extensive margin of exports. Using Chinese firm‐product data during 2000–2006, however, this paper finds that the effect of nominal exchange rates on exporter numbers is significant and even comparable with that of tariffs. The effects are larger for processing trade, low income destinations, and differentiated products. Financial constraints are a factor that significantly enlarges the effect of nominal exchange rates on exporter numbers.

Suggested Citation

  • Zhe Chen & Yoshinori Kurokawa, 2022. "Do exporters respond to both tariffs and nominal exchange rates? Evidence from Chinese firm‐product data," Review of International Economics, Wiley Blackwell, vol. 30(2), pages 514-548, May.
    • Handle: RePEc:bla:reviec:v:30:y:2022:i:2:p:514-548
    DOI: 10.1111/roie.12573
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