Working Paper: NBER ID: w14632
Authors: Albert Park; Dean Yang; Xinzheng Shi; Yuan Jiang
Abstract: We ask how export demand shocks associated with the Asian financial crisis affected Chinese exporters. We construct firm-specific exchange rate shocks based on the pre-crisis destinations of firms' exports. Because the shocks were unanticipated and large, they are a plausible instrument for identifying the impact of exporting on firm productivity and other outcomes. We find that firms whose export destinations experience greater currency depreciation have slower export growth, and that export growth leads to increases firm productivity and other firm performance measures. Consistent with "earning-by-exporting", the productivity impact of export growth is greater when firms export to more developed countries.
Keywords: Exporting; Firm Performance; Asian Financial Crisis; China; Productivity
JEL Codes: D24; F10; F31; L60
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| export demand shocks (F41) | firm performance (L25) |
| exchange rate shocks (F31) | changes in exports (F14) |
| currency depreciation (F31) | export growth (F43) |
| export growth (F43) | firm performance (L25) |
| changes in exports (F14) | total factor productivity (D24) |
| changes in exports (F14) | total sales (L81) |
| changes in exports (F14) | return on assets (G32) |