Risk, Uncertainty and China's Exports

11 Pages Posted: 2 Jun 2006

See all articles by Guangzhong Li

Guangzhong Li

Sun Yat-Sen Business School, Sun Yat-Sen University

Jan P. Voon

Lingnan University

Jimmy Ran

Sun Yat-Sen University (SYSU) - Department of Economics

Abstract

Both theoretical and empirical models were developed in this paper to examine how exporters response to real exchange rate volatility (RERV) and real exchange rate misalignment (RERM) varies across industries in China. The theoretical model indicates that the impact of RERV depends on exporters attitude to risk while the effect of RERM is ambiguous. Using disaggregated industry data, Chinese exporters were found to be averse to RERV and RERM. This suggests that the negative impact on China's exports resulting from a revaluation of the RMB will be mitigated by a positive impact due to the reduction of RERM.

Suggested Citation

Li, Guangzhong and Voon, Jan P. and Ran, Jimmy, Risk, Uncertainty and China's Exports. Australian Economic Papers, Vol. 45, No. 2, pp. 158-168, June 2006. Available at SSRN: https://ssrn.com/abstract=905627 or http://dx.doi.org/10.1111/j.1467-8454.2006.00284.x

Guangzhong Li

Sun Yat-Sen Business School, Sun Yat-Sen University ( email )

135 Xingang Xi Road
Guangzhou, Guangdong 510275
China

Jan P. Voon (Contact Author)

Lingnan University ( email )

Department of Economics
Tuen Mun, NT
Hong Kong

Jimmy Ran

Sun Yat-Sen University (SYSU) - Department of Economics ( email )

Tuen Mun, NT
Hong Kong

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