GEP Research Paper 08/42
Exchange Rate Uncertainty and Export Decisions in the UK
David Greenaway, Richard Kneller and Xufei Zhang
Summary
Using data on UK manufacturing firms, we examine the effects of exchange rate uncertainty on firm decisions on export entry and export intensity. The use of micro data and new measures of exchange rate uncertainty enable us to test for hysteresis effects in a new way and to test the sensitivity of results to a range of different measures.
Abstract
Using data on UK manufacturing firms, we examine the effects of exchange rate uncertainty on firm decisions on export market entry and export intensity. The use of micro data and new measures of exchange rate uncertainty enable us to test for hysteresis effects in a new way and to test the sensitivity of results to a range of different measures. The results show that exchange rate uncertainty has little effect on firms’ export participation but a significant impact on export intensity.
JEL classification: D81, F23, F31, F36
Keywords: Exchange rate uncertainty, export share, hysteresis effects
Issued in November 2008
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