Nottingham Centre for Research on
Globalisation and Economic Policy (GEP)

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

 

This paper is available in PDF format

 

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