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Exchange Rates, Exports and FDI: A Microeconometric Analysis

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  • David Greenaway
  • Richard Kneller
  • Xufei Zhang

Abstract

Our focus is the effects of exchange rate movements on firm decisions on export market entry and export intensity. Using data on UK manufacturing firms we find that exchange rate movements have little effect on firm export participation but have a significant impact on export shares. We also investigate the effects of exchange rate movements on the export behaviour of multinationals, and find important differences according to country of origin. Multinationals firms originating from outside the European Union are less affected by changes in the exchange rate compared to those inside, whose reactions are similar to domestic firms.

Suggested Citation

  • David Greenaway & Richard Kneller & Xufei Zhang, 2008. "Exchange Rates, Exports and FDI: A Microeconometric Analysis," Discussion Papers 08/09, University of Nottingham, GEP.
    • Handle: RePEc:not:notgep:08/09
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