Spillover Effects of Exchange Rates : A Study of the Renminbi / Arvind Subramanian, Prachi Mishra, Aaditya Mattoo.

Format:

Book

Government document

Author/Creator:

Subramanian, Arvind.

Contributor:

Mattoo, Aaditya.

Mishra, Prachi.

International Monetary Fund. Research Department, issuing body.

Series:

IMF Working Papers; Working Paper ; No. 2012/088

IMF Working Papers

Language:

English

Subjects (All):

Foreign exchange rates--China.

Foreign exchange rates.

Renminbi--China.

Renminbi.

Exports--China.

Exports.

China.

Local Subjects:

China.

Physical Description:

1 online resource (43 pages)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2012.

Language Note:

English

System Details:

data file

Summary:

This paper estimates the impact of China's exchange rate changes on exports of competitor countries in third markets, which we call the "spillover effect". We use recent theory to develop an identification strategy in which competition between China and its developing country competitors in specific products and destinations plays a key role. We exploit the variation - afforded by disaggregated trade data - across exporters, importers, product, and time to estimate this spillover effect. We find robust evidence of a statistically and quantitatively significant spillover effect. Our estimates suggest that a 10 percent appreciation of China's real exchange rate boosts on average a developing country's exports of a typical 4-digit HS product category to third markets by about 1.5-2 percent. The magnitude of the spillover effect varies systematically with product characteristics as implied by theory.

Contents:

Cover; Contents; I. Introduction; II. Analytical Framework; III. Estimation Strategy; Figures; Figure 1. Identification Strategy; IV. Data; V. Results; A. Main findings and robustness; B. Spillover effect and product characteristics; C. Discussion of Magnitudes; VI. Conclusion; References; Figure 2. Average Index of competition; Figure 3a. Value-based Index of Competition: By Region of Exporter; Figure 3b. Count-based Index of Competition: By Region of Exporter; Tables; Table 1. Exports from Developing Countries and Chinese Exchange Rates: Baseline Specification; Table 2. Robustness

Table 3. Robustness to Alternative Exchange Rate MeasuresTable 4. Robustness to Omitted Variables; Table 5. Robustness By Region of Exporter; Table 6. Robustness to Degree of Product Aggregation (HS 2-Digit Level); Table 7. Products Distinguished by Degree of Differentiation; Table 8. Products Distinguished by Domestic Value Added; Table 9. Range of Estimated Spillover Effect of a 10 percent Depreciation of Chinese Exchange Rate; Appendix: Steps in the Derivation of Equation; Appendix Tables; Table A1. Summary Statistics; Table A2. List of countries

Notes:

Description based upon print version of record.

Includes bibliographical references.

Description based on online resource; title from PDF title page (ebrary, viewed June 16, 2014).

ISBN:

9781475552300

1475552300

9781475516876

1475516878