Determinants of Currency Invoicing in Japanese Exports: A firm-level analysis
Currency 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.
|Date of creation:||Jun 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.rieti.go.jp/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Donnenfeld, Shabtai & Zilcha, Itzhak, 1991.
"Pricing of Exports and Exchange Rate Uncertainty,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(4), pages 1009-22, November.
- Sven W. Arndt & J. David Richardson, 1987. "Real-Financial Linkages Among Open Economies," NBER Working Papers 2230, National Bureau of Economic Research, Inc.
- Shabtai Donnenfeld & Alfred Haug, 2003. "Currency Invoicing in International Trade: an Empirical Investigation," Review of International Economics, Wiley Blackwell, vol. 11(2), pages 332-345, 05.
- Yusuru Ozeki & George S. Tavlas, 1992. "The Internationalization of Currencies; An Appraisal of the Japanese Yen," IMF Occasional Papers 90, International Monetary Fund.
- John F. O. Bilson & Richard C. Marston, 1984. "Exchange Rate Theory and Practice," NBER Books, National Bureau of Economic Research, Inc, number bils84-1, 07.
- Bacchetta, Philippe & van Wincoop, Eric, 2005.
"A theory of the currency denomination of international trade,"
Journal of International Economics,
Elsevier, vol. 67(2), pages 295-319, December.
- P. Bacchetta & E. van Wincoop, 2002. "A Theory of the Currency Denomination of International Trade," DNB Staff Reports (discontinued) 75, Netherlands Central Bank.
- Philippe Bacchetta & Eric van Wincoop, 2002. "A Theory of the Currency Denomination of International Trade," NBER Working Papers 9039, National Bureau of Economic Research, Inc.
- Philippe Bacchetta & Eric van Wincoop, 2001. "A Theory of the Currency Denomination of International Trade," Working Papers 01.07, Swiss National Bank, Study Center Gerzensee.
- Bacchetta, Philippe & Van Wincoop, Eric, 2002. "A theory of the currency denomination of international trade," Working Paper Series 0177, European Central Bank.
- Philippe Bacchetta & Eric van Wincoop, 2002. "A theory of the currency denomination of international trade," International Finance Discussion Papers 747, Board of Governors of the Federal Reserve System (U.S.).
- Philippe Bacchetta & Eric van Wincoop, 2001. "A Theory of the Currency Denomination of International Trade," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 01.13, Université de Lausanne, Faculté des HEC, DEEP.
- Friberg, Richard, 1998. "In which currency should exporters set their prices?," Journal of International Economics, Elsevier, vol. 45(1), pages 59-76, June.
- George S. Tavlas, 1997. "The International Use of the US Dollar: An Optimum Currency Area Perspective," The World Economy, Wiley Blackwell, vol. 20(6), pages 709-747, 09.
- Shin-ichi Fukuda & Ji Cong, 1994.
"On the Choice of Invoice Currency by Japanese Exporters: The PTM Approach,"
Discussion Paper Series
a289, Institute of Economic Research, Hitotsubashi University.
- Fukuda Shin-ichi & Cong Ji, 1994. "On the Choice of Invoice Currency by Japanese Exporters: The PTM Approach," Journal of the Japanese and International Economies, Elsevier, vol. 8(4), pages 511-529, December.
- By Shinji Takagi & Yushi Yoshida, 2001.
"Exchange Rate Movements and Tradable Goods Prices in East Asia: An Analysis Based on Japanese Customs Data, 1988–1999,"
IMF Staff Papers,
Palgrave Macmillan, vol. 48(2), pages 266-289.
- Yushi Yoshida & Shinji Takagi, 1999. "Exchange Rate Movements and Tradable Goods Prices in East Asia; An Analysis Basedon Japanese Customs Data, 1988-1998," IMF Working Papers 99/31, International Monetary Fund.
- Marcus Noland, 1995. "China and the International Economic System," Working Paper Series WP95-6, Peterson Institute for International Economics.
- Shabtai Donnenfeld & Alfred A. Haug, 2001.
"Currency Invoicing of U.S. Imports,"
2002_11, York University, Department of Economics, revised Apr 2002.
- Friberg, Richard & Wilander, Fredrik, 2008. "The currency denomination of exports -- A questionnaire study," Journal of International Economics, Elsevier, vol. 75(1), pages 54-69, May.
- Johnson, Martin & Pick, Daniel, 1997. "Currency Quandary: The Choice of Invoicing Currency under Exchange-Rate Uncertainty," Review of International Economics, Wiley Blackwell, vol. 5(1), pages 118-28, February.
When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:10034. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (NUKATANI Sorahiko)
If references are entirely missing, you can add them using this form.