IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/20083.html

Exchange Rates, International Outsourcing, and Firm Export Dynamics

Author

Listed:
  • Tomohiko INUI
  • Young Gak KIM

Abstract

Using the most comprehensive Japanese firm-level dataset, we investigate the effect of exchange rate fluctuations on Japanese firms' performance in the international market. We examine firm characteristics based on firm export dynamics. The estimation results overall indicate the depreciation of the yen may play an important role in the expansion of export, but a limited role in terms of entry to the export market. The results also show that export elasticity is significantly affected by import intensity, and decreases from 0.81 in 1997 to 0.64 in 2015 because of the increased import intensity, indicating that fully globalized firms utilize imports to alleviate negative shocks from exchange rates on exports and to improve price competitiveness.

Suggested Citation

  • Tomohiko INUI & Young Gak KIM, 2020. "Exchange Rates, International Outsourcing, and Firm Export Dynamics," Discussion papers 20083, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:20083
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/20e083.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tomohiko Inui & Keiko Ito & Daisuke Miyakawa, 2017. "Export Experience, Product Differentiation and Firm Survival in Export Markets," The Japanese Economic Review, Springer, vol. 68(2), pages 217-231, June.
    2. Basile, Roberto, 2001. "Export behaviour of Italian manufacturing firms over the nineties: the role of innovation," Research Policy, Elsevier, vol. 30(8), pages 1185-1201, October.
    3. Mary Amiti & Oleg Itskhoki & Jozef Konings, 2014. "Importers, Exporters, and Exchange Rate Disconnect," American Economic Review, American Economic Association, vol. 104(7), pages 1942-1978, July.
    4. Nicolas Berman & Philippe Martin & Thierry Mayer, 2012. "How do Different Exporters React to Exchange Rate Changes?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(1), pages 437-492.
    5. Cheung, Yin-Wong & Sengupta, Rajeswari, 2013. "Impact of exchange rate movements on exports: An analysis of Indian non-financial sector firms," Journal of International Money and Finance, Elsevier, vol. 39(C), pages 231-245.
    6. Blum, Bernardo S. & Claro, Sebastian & Horstmann, Ignatius J., 2013. "Occasional and perennial exporters," Journal of International Economics, Elsevier, vol. 90(1), pages 65-74.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chahir Zaki & Alia Abdallah & May Sami, 2019. "How Do Trade Margins Respond to Exchange Rate? The Case of Egypt," Journal of African Trade, Springer, vol. 6(1), pages 60-80, December.
    2. Tscheke, Jan, 2016. "Operational Hedging of Exchange Rate Risks," Discussion Papers in Economics 30227, University of Munich, Department of Economics.
    3. Piveteau, Paul & Smagghue, Gabriel, 2019. "Estimating firm product quality using trade data," Journal of International Economics, Elsevier, vol. 118(C), pages 217-232.
    4. Nagengast, Arne J. & Bursian, Dirk & Menz, Jan-Oliver, 2021. "Dynamic pricing and exchange rate pass-through: Evidence from transaction-level data," European Economic Review, Elsevier, vol. 133(C).
    5. Xu, Jianwei & Du, Qingyuan & Wang, Yaqi, 2019. "Two-sided heterogeneity and exchange rate pass-through," Economics Letters, Elsevier, vol. 183(C), pages 1-1.
    6. Fatum, Rasmus & Liu, Runjuan & Tong, Jiadong & Xu, Jiayun, 2018. "Beggar thy neighbor or beggar thy domestic firms? Evidence from 2000 to 2011 Chinese customs data," Journal of International Economics, Elsevier, vol. 115(C), pages 16-29.
    7. Fracasso, Andrea & Secchi, Angelo & Tomasi, Chiara, 2022. "Export pricing and exchange rate expectations under uncertainty," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 135-152.
    8. Jérôme Héricourt & Clément Nedoncelle, 2016. "How Multi-Destination Firms Shape the Effect of Exchange Rate Volatility on Trade: Micro Evidence and Aggregate Implications," Working Papers 2016-05, CEPII research center.
    9. Chen, Natalie & Juvenal, Luciana, 2022. "Markups, quality, and trade costs," Journal of International Economics, Elsevier, vol. 137(C).
    10. Clément Nedoncelle & Julien Wolfersberger, 2025. "Weather shocks and firm exports in developing countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 161(2), pages 743-784, May.
    11. Matteo Bugamelli & Silvia Fabiani & Stefano Federico & Alberto Felettigh & Claire Giordano & Andrea Linarello, 2018. "Back on Track? A Macro–Micro Narrative of Italian Exports," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(1), pages 1-31, March.
    12. Nick Jacob & Giordano Mion, 2024. "On the productivity advantage of cities," Journal of Economic Geography, Oxford University Press, vol. 24(5), pages 679-705.
    13. Giordano, Claire & Lopez-Garcia, Paloma, 2019. "Firm heterogeneity and trade in EU countries: a cross-country analysis," Occasional Paper Series 225, European Central Bank.
    14. Silviano Esteve‐Pérez, 2021. "Previous experience, experimentation and export survival: Evidence from firm‐product‐destination level data," The World Economy, Wiley Blackwell, vol. 44(9), pages 2638-2682, September.
    15. Xiaohua Bao & Hailiang Huang & Larry D. Qiu & Xiaozhuo Wang, 2024. "Exchange rate expectations and exports: Firm‐level evidence from China," Review of International Economics, Wiley Blackwell, vol. 32(2), pages 635-661, May.
    16. Ha, Jongrim & Marc Stocker, M. & Yilmazkuday, Hakan, 2020. "Inflation and exchange rate pass-through," Journal of International Money and Finance, Elsevier, vol. 105(C).
    17. Jérôme Héricourt & Clément Nedoncelle, 2015. "Relative Real Exchange-Rate Volatility, Multi-Destination Firms and Trade: Micro Evidence and Aggregate Implications," Working Papers 2015-03, CEPII research center.
    18. Joël Cariolle & Petros G Sekeris, 2021. "How export shocks corrupt: theory and evidence," Working Papers hal-03164648, HAL.
    19. Mary Amiti & Oleg Itskhoki & Jozef Konings, 2022. "Dominant Currencies: How Firms Choose Currency Invoicing and Why it Matters," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(3), pages 1435-1493.
    20. Jonathan Kearns & Nikhil Patel, 2016. "Does the financial channel of exchange rates offset the trade channel?," BIS Quarterly Review, Bank for International Settlements, December.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:20083. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: TANIMOTO, Toko (email available below). General contact details of provider: https://edirc.repec.org/data/rietijp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.