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The Impact of Chinese Exchange Rate Policy on the Rest of the World: Evidence from Firm-Level Data


  • Barry Eichengreen
  • Hui Tong


This paper aims to gauge the global effect of renminbi revaluation on stock markets. Using data on 12,300 firms in operating in tradable sectors in 44 economies, we find that expectations of renminbi appreciation reduce the relative stock returns of firms providing components or raw materials to China as inputs for that country's exports. We also find some evidence that expectations of renminbi appreciation reduce the stock prices of financially constrained firms.

Suggested Citation

  • Barry Eichengreen & Hui Tong, 2011. "The Impact of Chinese Exchange Rate Policy on the Rest of the World: Evidence from Firm-Level Data," Global Economic Review, Taylor & Francis Journals, vol. 40(2), pages 211-225.
  • Handle: RePEc:taf:glecrv:v:40:y:2011:i:2:p:211-225
    DOI: 10.1080/1226508X.2011.585054

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    Cited by:

    1. Huang, Lin & Wu, Jia & Zhang, Rui, 2014. "Exchange risk and asset returns: A theoretical and empirical study of an open economy asset pricing model," Emerging Markets Review, Elsevier, vol. 21(C), pages 96-116.

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    China; exchange rate; firms; rest of the world;


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