2012•Journal of Tsinghua University(Science and Technology)Requires access
Exchange rate elasticity of China's import/export industry and the impact of capital intensity
Qiushi Li
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Abstract
Panel data from the Chinese Customs was used to calculate the impact of the RMB effective exchange rate on imports and exports for different industries,with both domestic and foreign GDP as control variables.The results show that the exchange rate elasticities for imports and exports for 18 industries were all negative from 2002 to 2010,which means that the appreciation of the RMB had a negative effect on both imports and exports of mainland China.The exchange rate elasticity varies widely across industries,with higher capital intensive industries,seeing stronger impacts of the RMB appreciation on their imports and exports.The exchange rate elasticity of imports increases 0.388 and of exports increases 0.741 in absolute values with a one standard deviation increase in the capital-labor ratio.