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Exchange Rate Movements, Exporting by Japanese firms, and the Role of R&D and Global Outsourcing

industry and manufacturing, Innovation and Technology, Japan, Trade

Exchange Rate Movements, Exporting by Japanese firms, and the Role of R&D and Global Outsourcing

We investigate the effect of the exchange rate on Japanese firms’ performance in the international markets, using comprehensive Japanese firm-level dataset. We examine the effect of firm characteristics on firm export dynamics at the firmregion export level. The estimation results overall indicate that a depreciation in the exchange rate may play an important role in export expansion or entry, but limited role in additional entry to a new regional market. The results also indicate that Japanese firms strategically utilise imports to alleviate negative shocks from the exchange rate on exports for price competitiveness.  

ERIA-DP-2018-19

Date

28 March 2019

Category

Innovation and Technology , Trade

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