The Impact of Real Exchange Rate Movements on Firm Performance: A Case Study of Taiwanese Manufacturing Firms
Resource
Japan and the World Economy, 21(1), 85-96
Journal
Japan and the World Economy
Pages
85-96
Date Issued
2009
Date
2009
Author(s)
Fung, Loretta
Abstract
Taiwan experienced large depreciations of its currency, the New Taiwan (NT) dollar, in the late 1990s. The largest real depreciation, 13 per cent, occurred during the East Asian Financial Crisis. Since Taiwan was subjected neither to the economic turmoil of the crisis itself nor to the subsequent reforms, its experience provides a good opportunity for studying the effects of exchange rate changes on firm performance. This paper empirically examines the exchange rate effects on firm exports, domestic sales, total sales, value-added and productivity, by using data on firms listed on the Taiwan Stock Exchange merged with customs trade data covering the period of 1992-2000. Our findings indicate that the real depreciation of the NT dollar led to an increase in exports, domestic sales, total sales, value-added, and productivity. In addition, we find that the productivity improvement induced by real currency depreciation may be a result of firm scale expansion. © 2008 Elsevier B.V. All rights reserved.
SDGs
Type
journal article
File(s)![Thumbnail Image]()
Loading...
Name
48.pdf
Size
23.43 KB
Format
Adobe PDF
Checksum
(MD5):350bf098db20d6cea462f064945ec353