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Identifier to cite or link to this item: https://hdl.handle.net/10086/15114

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Title
The Influence of Intra-Industry Trade on Export Sensitivity to Exchange Rates
Creator
Creator Name
Oguro, Yoko Oguro, Yoko
小黒, 曜子 小黒, 曜子
オグロ, ヨウコ オグロ, ヨウコ
Affiliation
Affiliation Name
Hitotsubashi University
Editor
Contributor Name
社会科学における統計分析拠点構築 = Research Unit for Statistical Analysis in Social Sciences
Key Word
Trade
Exchange rates
Intra-industry trade
JEL
F00
F10
F14
F19
Abstract
Exchange rates play a key role in the literature on the determinants of trade, and this role is currently receiving a great deal of attention in the context of global imbalances. This paper adds to the literature that suggests that exports will be less sensitive to exchange rate movements under certain circumstances. This is the first study, to the author's best knowledge, which empirically investigates the sensitivity of export quantities to exchange rates in the context of Intra-industry trade (IIT). It is assumed that more IIT implies a smaller elasticity of substitution among differentiated products and vice versa. The model presented in this paper suggests that the gap in production costs has an influence on IIT as well. The empirical analysis investigates six cross-country industry-panels for the bilateral trade of eight East Asian countries, Japan, and the United States with the EU, East Asia, Japan, and North America. The empirical results confirm that export sensitivity to exchange rates declines as the extent of IIT increases. An obvious policy implication of the findings is that the effectiveness of exchange rate adjustments as a policy tool for addressing trade imbalances diminishes when substantial IIT exists.
Description
First version: October 2007; This version: December 2007
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2007-12
Language
English(eng)
Resource Type
technical report
Version Type
NA
Is Part OfRelation -
Related Title
Hi-Stat Discussion paper series, No. 222
Is Replaced ByRelation -
Related Identifier
HDL
  http://hdl.handle.net/10086/16259
Relation
Related Title
This version has been revised. The new version is available at http://hdl.handle.net/10086/16259.
Related Identifier
URI
  http://21coe.ier.hit-u.ac.jp/english/index.html
Sponsorship
21世紀COEプログラム = 21st-Century COE Program
Edition
Revised Version: December 2007
Appears in Collections
Hi-Stat Discussion paper series
URL
https://hdl.handle.net/10086/15114