CCER讨论稿:Exchange Rate and Domestic Value Added in Processing Exports: Evidence from Chinese Firms

发布日期:2018-08-02 16:36:52    来源:北京大学国家发展研究院

E2018017                                                       2018-08-02

Exchange Rate and Domestic Value Added in Processing Exports: Evidence from Chinese Firms

Xiaomin Cui  Miaojie Yu [1]

 1st Aug 2018

This paper studies the effect of the exchange rate on the domestic value-added ratios of processing exports via two channels: substitution and markup. First, home currency depreciation leads to an increase in domestic value-added ratios through affecting each firm’s imported and domestic intermediate inputs (the substitution channel). Second, home currency depreciation improves exporters’ profitability and results in higher domestic value-added ratios of processing firms (the markup channel), as exports become more competitive with depreciation. Using Chinese firm-level production data and product-level trade transaction data, our corresponding empirical analysis finds that processing firms’ domestic value-added ratios increase significantly through the two channels in response to firm-level nominal effective exchange rate depreciation. The markup channel contributes almost 39 percent of the variation in domestic value-added ratios in response to changes in the exchange rate.

Keywords: Exchange Rate, Markups, Domestic Value-added Ratios

JEL: F14 F31 O11

讨论稿下载:E2018018

[1]  Xiaomin Cui, Institute of World Economics and Politics, Chinese Academy of Social Sciences, Email: cuixiaomin@cass.org.cn; Miaojie Yu, corresponding author, China Center for Economic Research, Peking University, Email: mjyu@nsd.pku.edu.cn.