Strategic Currency Choice In International Trade
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Strategic Currency Choice In International Trade
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Author : Maria Sokolova
language : en
Publisher:
Release Date : 2015
Strategic Currency Choice In International Trade written by Maria Sokolova and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
How exporters choose currency for their exports? Using highly disaggregated data on the population of Russian Federation exporting firms between 2005 and 2009 this paper studies the strategic determinants of currency invoicing decisions. Strategic morives embrace two occurrences in currency choice: firstly, the realisation of bargaining powers of the seller and the buyer, where I perform a novel firm-level test. Notably, in contrast to the micro and macro determinants, bargaining powers are found to have different effect on currency choice at the aggregate and firm level. On the industry level, higher bargaining power of the participating countries lessens the reliance on “vehicle” currency and increases the probability of use of the trading partners' currencies, whereas the increase of the firm level bargaining power increases the probability of application of the vehicle currency. This indicates that the firm-level dimension should be taken into account when making inferences on currency denomination. Secondly, strategic currency choice determinants include competition-enhanced characteristics of international trade: the novel evidence suggests the firm-level currency choice “mimicking” between the firms and the preference of vehicle currency for the relatively cheaper goods. The robustness of these results is tested among the subsamples of heterogeneous exporters sizes and I find that the expansion of the bilateral trading partners' currencies usage is mostly sourced from the smaller exporters. On the whole, the results of this paper support the “bargaining over invoicing” theory, which indicates that increases in firms' export size change the buyer's and seller's preferences over currency invoicing.
Export Savvy
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Author : Zak Karamally
language : en
Publisher: Routledge
Release Date : 2014-07-16
Export Savvy written by Zak Karamally and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-07-16 with Business & Economics categories.
Exporting is a dynamic area of commerce that is often misunderstood. However, it takes know-how to gain a profit. Export Savvy: From Basics to Strategy explains export management in its full context from the concepts of international trade to the key elements that influence and comprise its effectiveness. This understanding will help you make better decisions so you can maximize your potential in international markets. Export Savvy is a comprehensive book that fills in the gaps left by other books on this subject. While these books concentrate on the mundane tools and techniques of exporting, Export Savvy relates the export experience to the totality of the commercial experience. The “foreignness” of exporting is framed in familiar notions enabling you to conceive or create an export program that is uniquely your own. In simple language, this innovative book breaks exporting down into ten easy-to-understand aspects: the concepts and “economics” of international trade the perspective and influence of governments tariffs and other impediments to the export transaction the impact of foreign currencies methods of payment and collection the physical movement of goods to the customer controls imposed on exports for national security and other national policy reasons cultural barriers and related considerations the uniqueness of marketing beyond one's national boundaries the legal environment and issues affecting the exporter With the proven knowledge in Export Savvy, you can make exporting an extension of your domestic business experience. You will feel free to approach exporting confidently and strategically to maximize your profits in this important area of business. Visit the book's website at http://www.exportsavvy.com
International Business 2 E Concepts Environment And Strategy
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Author : Vyuptakesh Sharan
language : en
Publisher: Pearson Education India
Release Date : 2008-02
International Business 2 E Concepts Environment And Strategy written by Vyuptakesh Sharan and has been published by Pearson Education India this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008-02 with Business categories.
The Value Of Invoice Currency Choice In International Trade
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Author : Pekka Ahtiala
language : en
Publisher:
Release Date : 1994
The Value Of Invoice Currency Choice In International Trade written by Pekka Ahtiala and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with categories.
Dominant Currency Pricing
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Author : Minkyu Son
language : ko
Publisher:
Release Date : 2023
Dominant Currency Pricing written by Minkyu Son and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023 with categories.
English Abstract: Using product-level data for Korean exports from 2000 to 2021, this paper examines the determinants of invoicing currency in international trade. We obtain robust evidence of the two underlying motives in export currency choice. First is strategic complementarities. Korean exports tend to be invoiced in a currency that is predominantly used by competitors in the market. Second is real hedging. Industries that rely on imported inputs denominated in a certain currency are more likely to invoice their exports in the currency of importing. These two channels would serve to maintain the Dominant Currency Pricing (DCP), in which just few currencies such as the US dollar play an outsized role in global trade. To further document the role of these two motives, we conduct a novel event study on the establishment of a direct foreign exchange market for the Korean won and the Chinese renminbi in 2014. The direct foreign exchange market stimulated renminbi invoicing among Korean exports, particularly more to destinations with high market shares of Chinese exporters, and more from Korean industries relying on renminbi-denominated imported inputs. Finally, as a key implication of invoicing currency, we confirm its close link with the degree of exchange rate pass-through. The destination prices of Korean exports are more sensitive to the dollar-destination currency exchange rate than the exchange rate between trading partners, due to its high reliance on dollars in export invoicing.
Micro Macro And Strategic Forces In International Trade Invoicing
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Author : Linda S. Goldberg
language : en
Publisher:
Release Date : 2009
Micro Macro And Strategic Forces In International Trade Invoicing written by Linda S. Goldberg and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with Foreign exchange categories.
The use of different currencies in the invoicing of international trade transactions plays a major role in the international transmission of economic fluctuations. Existing studies argue that an exporter's invoicing choice reflects structural aspects of her industry, such as market share and the price-sensitivity of demand, the hedging of marginal costs, due for instance to the use of imported inputs, and macroeconomic volatility. We use a new highly disaggregated dataset to assess the roles of the various invoicing determinants. We find support for the factors identified in the literature, and document a new feature, in the form of a link between shipments size and invoicing. Specifically, larger transactions are more likely to be invoiced in the importer's currency. We offer a potential theoretical explanation for the empirical link between transaction size and invoicing by allowing invoicing to be set through a bargaining between exporters and importers, a feature that is absent from existing models despite its empirical relevance.
Dominant Currency Paradigm A New Model For Small Open Economies
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Author : Camila Casas
language : en
Publisher: International Monetary Fund
Release Date : 2017-11-22
Dominant Currency Paradigm A New Model For Small Open Economies written by Camila Casas and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-11-22 with Business & Economics categories.
Most trade is invoiced in very few currencies. Despite this, the Mundell-Fleming benchmark and its variants focus on pricing in the producer’s currency or in local currency. We model instead a ‘dominant currency paradigm’ for small open economies characterized by three features: pricing in a dominant currency; pricing complementarities, and imported input use in production. Under this paradigm: (a) the terms-of-trade is stable; (b) dominant currency exchange rate pass-through into export and import prices is high regardless of destination or origin of goods; (c) exchange rate pass-through of non-dominant currencies is small; (d) expenditure switching occurs mostly via imports, driven by the dollar exchange rate while exports respond weakly, if at all; (e) strengthening of the dominant currency relative to non-dominant ones can negatively impact global trade; (f) optimal monetary policy targets deviations from the law of one price arising from dominant currency fluctuations, in addition to the inflation and output gap. Using data from Colombia we document strong support for the dominant currency paradigm.
Trade Finance And Endogenous Invoicing Currency
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Author : Tao Liu
language : en
Publisher:
Release Date : 2018
Trade Finance And Endogenous Invoicing Currency written by Tao Liu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
Financial market imperfections severely restrict currency usage in international trade, but formal analysis is elusive.(Gopinath, 2015) This paper develops a three-country sticky price model with financial frictions to address the endogenous invoicing currency choices in international trade. In our unified framework exporters' invoicing currency decisions are linked to financial, industrial and macroeconomics forces, with the key innovation on financial channel. Using highly disaggregated data from Colombia, we provide new firm-level evidence that financial factors significantly affect the patterns of currency usage. We show that exporters prefer the currency with a more developed financial market, especially for small firms in financially vulnerable sectors. In particular, a developing country with medium-level of financial development could enhance its currency usage by more than 10% if it further develops the financial market. Furthermore, volatile exchange rate will increase the chance of using the vehicle currency. We also confirm empirically the importance of industrial and strategic factors for invoicing currency decision, although they only have the secondary effects.
International Business Concept Environment And Strategy
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Author : Vyuptakesh Sharan
language : en
Publisher: Pearson Education India
Release Date : 2010
International Business Concept Environment And Strategy written by Vyuptakesh Sharan and has been published by Pearson Education India this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with Industrial management categories.
International Business: Concept, Environment and Strategy is written in a pragmatic way leaning towards managerial aspects, thus encouraging students to explore international business as a career choice. It deals with the latest topics and development which we are witnessing around the globe. It attempts to impart the core body of knowledge in international business in an interesting and lively manner. This text not only describes the ideas of international business but it also uses contemporary examples, scenarios, and cases to help students effectively put theory into practice.
Dominant Currencies And External Adjustment
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Author : Gustavo Adler
language : en
Publisher: International Monetary Fund
Release Date : 2020-07-20
Dominant Currencies And External Adjustment written by Gustavo Adler and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-07-20 with Business & Economics categories.
The extensive use of the US dollar when firms set prices for international trade (dubbed dominant currency pricing) and in their funding (dominant currency financing) has come to the forefront of policy debate, raising questions about how exchange rates work and the benefits of exchange rate flexibility. This Staff Discussion Note documents these features of international trade and finance and explores their implications for how exchange rates can help external rebalancing and buffer macroeconomic shocks.