The effect of exchange rates on firm exports: the role of imported intermediate inputs.

Greenaway, David and Kneller, Richard and Zhang, Xufei (2010) The effect of exchange rates on firm exports: the role of imported intermediate inputs. World economy, 33 (8). pp. 961-986. ISSN 0378-5920

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Abstract

In this paper we investigate the effect of exchange rate changes on the exports of UK manufacturing firms, but draw on the macro literature to consider the effects exchange rates have on imported intermediate inputs. Real exchange rate appreciations make the foreign export price of goods and services produced by domestic firms more expensive, but also make imported inputs cheaper. Our results provide support for this view; we find a significant negative effect from a measure of the export destination weighted real effective exchange rate and an offsetting effect from the imported intermediate input weighted exchange rate on export sales.

Item Type:Article
Research Areas:Business School > Economics and International Development
Citations on ISI Web of Science:0
ID Code:4283
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Deposited On:02 Mar 2010 11:39
Last Modified:15 Oct 2013 07:01

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