Sector Sensitivity to Exchange Rates Fluctuations

European Integration and the Functionning of Product Market, A. Dierx, F. Ilzkovitz, K. Sekkat editors, Edward Elgard, 2004

137 Pages Posted: 16 Oct 2019

See all articles by Michel Fouquin

Michel Fouquin

CEPII

Khalid Sekkat

Université Libre de Bruxelles (ULB)

Malek Mansour

Université Libre de Bruxelles (ULB)

Nanno Mulder

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Laurence Nayman

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Date Written: 2001

Abstract

The present study focuses on the impact of the euro/dollar fluctuations on the European manufacturing industries. It tries to classify European sectors according to the exposure to competition from the dollar zone and to their sensitivity to exchange rate fluctuations. Combining the results of the two classifications, sectors which may be highly affected by the euro/dollar fluctuations are identified. Exposure to the dollar zone is measured in a way that takes into account both competition by imports in the Single European Market, as well as competition to exports in the dollar zone and in third markets. The study shows strong asymmetries among European countries. To estimate sectors’ sensitivity to exchange rate fluctuations, the regression relates trade volumes to exchange rate, cost and market structure variables. The estimation results evidence that cost considerations and exchange rates are important determinants of trade. The impact of exchange rate changes on trade varies across sectors. They are explained by concentration on the supply side and dynamics on the demand side.

Keywords: exchange rates, euro, dollar, manufacturing sector production and trade

JEL Classification: F4, F14, F31

Suggested Citation

Fouquin, Michel and Sekkat, Khalid and Mansour, Malek and Mulder, Nanno and Nayman, Laurence, Sector Sensitivity to Exchange Rates Fluctuations (2001). European Integration and the Functionning of Product Market, A. Dierx, F. Ilzkovitz, K. Sekkat editors, Edward Elgard, 2004, Available at SSRN: https://ssrn.com/abstract=2331524

Michel Fouquin (Contact Author)

CEPII ( email )

20 avenue de Ségur
Paris, F-75007
France
33638028694 (Phone)

Khalid Sekkat

Université Libre de Bruxelles (ULB) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium

Malek Mansour

Université Libre de Bruxelles (ULB)

CP 132 Av FD Roosevelt 50
Brussels, Brussels 1050
Belgium

Nanno Mulder

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

Laurence Nayman

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
18
Abstract Views
205
PlumX Metrics