Title: Impact of Exchange Rate Change and Fluctuation Range on Import Trade:A Research Based on Provincial Panel Data
Abstract: Most domestic literature regarding the impact of exchange rate movements on inter-provincial export trade used time series data as indicators of the rate. This study shows that the major trading partners of different provinces in China vary significantly. Based on quarterly import data of China's 31 administrative regions at provincial level from their major countries or regions, this paper analyzes the impact of the RMB real effective exchange rate fluctuation on provincial import trades. The study finds that, from a national perspective, the provincial real effective exchange rate fluctuations have a negative impact on current imports, but the lagged exchange rate appreciation has a promoting effect on import trades; from a regional perspective, the provincial real effective exchange rate changes have a huge influence on import trades in eastern regions, followed by a smaller influence in western regions and no obvious influence in the central regions. Finally, this paper uses panel threshold model to explore the impact of exchange rate fluctuations on import trades, coming to a conclusion that when exchange rate fluctuations are within 2.531 units, 1 unit of real effective exchange rate appreciation results in a 0.192-unit increase in imports, and when the fluctuations are greater than 2.531 units, 1 unit of real effective exchange rate appreciation corresponds to a 0.110-unit increase in imports.
Publication Year: 2014
Publication Date: 2014-01-01
Language: en
Type: article
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