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Research on the Impact of Exchange Rate Fluctuation on International Trade

In: Proceedings of the 2025 3rd International Conference on Digital Economy and Management Science (CDEMS 2025)

Author

Listed:
  • Zisheng Ou

    (Shenzhen Technology University)

Abstract

This research paper conducts a systematic analysis of exchange rate fluctuations on international trade by exploring the influence on price competitiveness along with trade volume performance and trade structure adjustments and cross-border investment flows. Exchange rates directly affect companies’ short-term commercial performance and drive long-term economic progress according to the research. Exchange rate depreciation enhances export competitiveness through lower prices but currency appreciation increases import costs to domestic industries which obtain their inputs from abroad. The paper explains the relationship between exchange rates and trade volumes through the concepts of the Marshall-Lerner condition and trade balance elasticity theory. Differing exchange rates operate as a crucial necessary element that shapes both resource allocation and industrial shaping processes for developing nations. This paper ends with suggestions for financial hedging systems and supply chain expansion as resilience measures against currency exchange rate variation impacts. The proposed research outlines multiple strategies to measure exchange rate policies across different industries and countries during their search for optimal policy outcomes.

Suggested Citation

  • Zisheng Ou, 2025. "Research on the Impact of Exchange Rate Fluctuation on International Trade," Advances in Economics, Business and Management Research, in: Wenke Zang & Chunping Xia (ed.), Proceedings of the 2025 3rd International Conference on Digital Economy and Management Science (CDEMS 2025), pages 673-686, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-770-0_76
    DOI: 10.2991/978-94-6463-770-0_76
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