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Currency Invoicing of U.S. Imports

Author

Listed:
  • Shabtai Donnenfeld

    () (York University, Canada)

  • Alfred A. Haug

    () (York University, Canada)

Abstract

This paper provides an explanation for the choice of currency of invoice of exports to the U.S. We find an empirical relationship between the riskiness of the exchange rate and the fraction of imports invoiced in the importer¡¯s currency, the exporter¡¯s currency, and a third country currency. The higher the volatility of the exchange rate, the larger is the fraction of imports invoiced in the importer¡¯s currency. Consequently, the fraction of invoicing in the exporter¡¯s or a third country currency is inversely related to the volatility of the exchange rate.

Suggested Citation

  • Shabtai Donnenfeld & Alfred A. Haug, 2001. "Currency Invoicing of U.S. Imports," Working Papers 2002_11, York University, Department of Economics, revised Apr 2002.
  • Handle: RePEc:yca:wpaper:2002_11
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    File URL: http://dept.econ.yorku.ca/research/workingPapers/working_papers/Donnenfeld_Haug_usa.pdf
    File Function: Revised version, 2002
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Ligthart, Jenny E. & Werner, Sebastian E.V., 2012. "Has the euro affected the choice of invoicing currency?," Journal of International Money and Finance, Elsevier, vol. 31(6), pages 1551-1573.
    2. Goldberg, Linda S. & Tille, Cédric, 2008. "Vehicle currency use in international trade," Journal of International Economics, Elsevier, vol. 76(2), pages 177-192, December.
    3. Parker, Miles, 2016. "How exporters set prices: evidence from a large behavioural survey," Working Paper Series 1974, European Central Bank.
    4. Linda S. Goldberg & Cedric Tille, 2006. "The internationalization of the dollar and trade balance adjustment," Staff Reports 255, Federal Reserve Bank of New York.
    5. Linda S. Goldberg & Cédric Tille, 2006. "The International Role of the Dollar and Trade Balance Adjustment," NBER Working Papers 12495, National Bureau of Economic Research, Inc.
    6. repec:bla:intmig:v:51:y:2017:i:2:p:452-474 is not listed on IDEAS
    7. ITO Takatoshi & KOIBUCHI Satoshi & SATO Kiyotaka & SHIMIZU Junko, 2010. "Determinants of Currency Invoicing in Japanese Exports: A firm-level analysis," Discussion papers 10034, Research Institute of Economy, Trade and Industry (RIETI).
    8. Takatoshi Ito & Satoshi Koibuchi & Kiyotaka Sato & Junko Shimizu, 2010. "Why has the yen failed to become a dominant invoicing currency in Asia? A firm-level analysis of Japanese Exporters' invoicing behavior," NBER Working Papers 16231, National Bureau of Economic Research, Inc.
    9. Ke Pang & Yao Tang, 2014. "Vertical Trade, Exchange Rate Pass-Through, and the Exchange Rate Regime," Open Economies Review, Springer, vol. 25(3), pages 477-520, July.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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