Export Experience and the Choice of Invoice Currency: Evidence from a Questionnaire Survey of Japanese SMEs

33 Pages Posted: 14 Dec 2023

See all articles by Mizuki Goto

Mizuki Goto

Kanto Gakuin University - College of Economics; Hitotsubashi University

Kazunobu Hayakawa

affiliation not provided to SSRN

Satoshi Koibuchi

Chuo University

Taiyo Yoshimi

Chuo University - Faculty of Economics

Abstract

This study examines the determinants of invoice currency, focusing on the effect of export experience based on a questionnaire survey of Japanese small and medium enterprises (SMEs) in the manufacturing industry. We find that exporters with extensive export experience tend to switch the invoice currency from the home currency to foreign currencies. The interpretation is that export experience mitigates the exchange rate uncertainty firms face and enables them to use foreign currency in their exports. This effect persists even if firms did not export in some years since they started exporting. We also find that the home currency is more likely to be chosen in the first export when the age of the exporter is higher, the total sales of the exporter are smaller, the exporter has an initiative to determine the invoice currency, and the exporter started exporting before the global financial crisis in 2007.

Keywords: Invoice currency, Export dynamics, Questionnaire survey, SMEs, Japan

Suggested Citation

Goto, Mizuki and Hayakawa, Kazunobu and Koibuchi, Satoshi and Yoshimi, Taiyo, Export Experience and the Choice of Invoice Currency: Evidence from a Questionnaire Survey of Japanese SMEs. Available at SSRN: https://ssrn.com/abstract=4664112 or http://dx.doi.org/10.2139/ssrn.4664112

Mizuki Goto

Kanto Gakuin University - College of Economics ( email )

1-50-1 Mutsuura-higashi
Kanazawa-ku
Yokohama, Kanagawa 236-8501
Japan

Hitotsubashi University ( email )

Kazunobu Hayakawa

affiliation not provided to SSRN ( email )

No Address Available

Satoshi Koibuchi

Chuo University ( email )

Taiyo Yoshimi (Contact Author)

Chuo University - Faculty of Economics ( email )

742-1
Higashi-Nakano, Hachioji
Tokyo, 192-0393
Japan

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