Dollar and Exports

52 Pages Posted: 6 May 2020 Last revised: 28 Jun 2021

See all articles by Valentina Bruno

Valentina Bruno

American University - Department of Finance and Real Estate; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Hyun Song Shin

Bank for International Settlements (BIS)

Multiple version iconThere are 2 versions of this paper

Date Written: April 26, 2020

Abstract

The strength of the US dollar has attributes of a barometer of dollar credit conditions, whereby a stronger dollar is associated with tighter dollar credit conditions. Using finely disaggregated data on export shipments, we examine how dollar strength impacts exports through the availability of dollar financing for working capital - an issue of importance due to the greater working capital needs for exports arising from longer supply chains and greater delay in receiving payments. We find that exporters who are reliant on dollar-funded bank credit suffer a decline in exports, and that this decline is larger than any decline in domestic sales. Our findings shed light on the broad dollar index as a global financial factor with real effects on the economy.

JEL Classification: F34, F42, F32, G15

Suggested Citation

Bruno, Valentina Giulia and Shin, Hyun Song, Dollar and Exports (April 26, 2020). Proceedings of Paris December 2020 Finance Meeting EUROFIDAI - ESSEC, Available at SSRN: https://ssrn.com/abstract=3586585 or http://dx.doi.org/10.2139/ssrn.3586585

Valentina Giulia Bruno

American University - Department of Finance and Real Estate ( email )

Kogod School of Business
4400 Massachusetts Ave., N.W.
Washington, DC 20016-8044
United States

HOME PAGE: http://www.american.edu/kogod/faculty/bruno.cfm

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Hyun Song Shin (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

HOME PAGE: http://www.bis.org/author/hyun_song_shin.htm

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