Exchange Rates and Exports: Evidence from Manufacturing Firms in the UK

University of Nottingham Working Paper No. 2007/13

42 Pages Posted: 9 Mar 2007

See all articles by David Greenaway

David Greenaway

University of Nottingham - School of Economics

Richard Kneller

University of Nottingham

Xufei Zhang

University of Nottingham

Date Written: 2007

Abstract

Our focus is the effects of exchange rate movements on firm decisions on export market entry and exit and export intensity. The analysis breaks down export adjustments between changes in export share by existing exporters and changes due to entry to and exit from export markets. Using data on a large sample of UK manufacturing firms, we find that exchange rate movements have little effect on firm's export participation and exit decisions. However, they do have a significant impact on export shares after entry. The responsiveness of the export share to exchange rate changes is not quantitatively small: one index point depreciation in the REER index will increase export share by about 1.28 percent. We also investigate the effects of exchange rate movements on the export behavior of multinationals, and find their export behavior is less likely to be affected by exchange rate changes than that of indigenous firms.

Keywords: Exchange rate movements, export share, multinational firms

JEL Classification: F23, F31, F36

Suggested Citation

Greenaway, David and Kneller, Richard and Zhang, Xufei, Exchange Rates and Exports: Evidence from Manufacturing Firms in the UK (2007). University of Nottingham Working Paper No. 2007/13. Available at SSRN: https://ssrn.com/abstract=968430 or http://dx.doi.org/10.2139/ssrn.968430

David Greenaway (Contact Author)

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
+44 115 951 5469 (Phone)
+44 115 951 4159 (Fax)

Richard Kneller

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Xufei Zhang

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
235
Abstract Views
1,170
rank
129,314
PlumX Metrics