Risk, uncertainty and China's exports

Guangzhong LI, Jan Piaw, Thomas VOON, Jimmy RAN

Research output: Journal PublicationsJournal Article (refereed)

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.
Original languageEnglish
Pages (from-to)158-168
Number of pages11
JournalAustralian Economic Papers
Volume45
Issue number2
DOIs
Publication statusPublished - 1 Jun 2006

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