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Export diversification and exchange-rate regimes: Evidences from 72 developing countries

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  • Liu, Xiaohui
  • Zhang, Jing

Abstract

Drawing on a new dataset of diversification of export products, the paper makes the first attempt in the empirical literature to test the impact of product diversification on the choice of exchange-rate regimes in a sample of 72 developing countries (1974-2010). The paper finds that diversification of export products has a positive but insignificant effect on the choice of fixed exchange-rate regimes. When export diversification is decomposed into the extensive and intensive margins, evidences of the paper show that higher level of product diversification at the extensive margin has a statistically positive effect on exchange-rate regime choices while the intensive margin has a negative but insignificant impact on the choice.

Suggested Citation

  • Liu, Xiaohui & Zhang, Jing, 2015. "Export diversification and exchange-rate regimes: Evidences from 72 developing countries," MPRA Paper 66448, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:66448
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    File URL: https://mpra.ub.uni-muenchen.de/66448/14/MPRA_paper_66448.pdf
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    References listed on IDEAS

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    Keywords

    Export Diversification; Extensive Margin; Intensive Margin; The Choice of Exchange-rate Regime; Developing Countries;

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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