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Bilateral Invoicing Currency Ratios: A methodology to calculate them from unilateral invoicing currency ratios

Author

Listed:
  • Yushi Yoshida

    (Shiga Unversity)

  • Fabien Rondeau

    (Univ Rennes, CNRS, CREM – UMR6211, F-35000 Rennes France)

Abstract

The worldwide database of invoicing currency ratios is provided by Boz, Casas, Georgiadis, Gopinath, Le Mezo, Mehl, and Nguyen (2022). However, the invoice ratios are aggregated at the country level. The invoice ratio of a country is the same for all trading partners. We suggest obtaining a bilateral invoice ratio by reverse- engineering the unilateral invoice ratios. In this note, we describe the methodology to conduct this extraction algorithm. With the bilateral trading partners’ weights, the bilateral invoicing matrix is obtained by pre-multiplying the Moore-Penrose pseudoinverse to the unilateral invoicing vector.

Suggested Citation

  • Yushi Yoshida & Fabien Rondeau, 2024. "Bilateral Invoicing Currency Ratios: A methodology to calculate them from unilateral invoicing currency ratios," Economics Working Paper Archive (University of Rennes & University of Caen) 2024-07, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    • Handle: RePEc:tut:cremwp:2024-07
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    References listed on IDEAS

    as
    1. Boz, Emine & Casas, Camila & Georgiadis, Georgios & Gopinath, Gita & Le Mezo, Helena & Mehl, Arnaud & Nguyen, Tra, 2022. "Patterns of invoicing currency in global trade: New evidence," Journal of International Economics, Elsevier, vol. 136(C).
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    More about this item

    Keywords

    invoice currency; invoicing ratio datasets; Moore-Penrose (pseudoinverse);
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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