Exchange Rate Movements,Financing Constraints And Firms Export

During the process of China's becoming the second economy in the world,the contribution of export on economy is outstanding.Export is beneficial for the development of economic and trade,and export is also vital for the survival and development of firms,it can improve the firm's profits,expand the demand of product,and reduce market risk within the scope of a certain area.However,since 2005 that the RMB exchange rate system reformed,the appreciation of RMB exchange rate have compressed the profit and export competitiveness of export firm in our country,but Chinese exports volume continued to increase,the process of the appreciation of the RMB exchange rate impact export would be affected by various external factors,especially financing constraints.The appreciation of the RMB exchange rate forced export firms through external financing to offset the negative impact of the appreciation of RMB exchange rate to its exports,this is a problem worthy to be discussed.However,financing constraints of different firms are diversity,and if and how financing constraints affected the relationship between RMB exchange rate movements and difference Chinese firm export?The characteristic of industry which export locate is different,so if and how the financing constraints of the firm in different industry affected the relationship between RMB exchange rate movements and different Chinese firms export.These problems are worth discussion and validation.So,under the condition of the appreciation of RMB exchange rate,analysis the relationship between financing constraints and the export of heterogeneity firm to the sustainable exports of firm has important practical significance.This study uses the combination of theory and empirical methods to analyze the relationship between exchange rate changes and firms' export is affected by its financing constraints.At first,this study based on Melitz(2003)model,introducing the exchange rate and financing constraints into Melitz(2003)model,based on two kinds of perspective that firm is faced with financing constraints and firm isn't faced with financing constraints,analysis if and how financing constraints affected the relationship between RMB exchange rate movements and difference Chinese firm export.Then,this study using Chinese industrial firms database data from 2005 to 2011,based on the micro level and the heterogeneity of the characteristic of firm and the characteristic of industry,analyze if and how financing affected the relationship between exchange rate movements and Chinese firm-level export.In the study,considering the different industries face different price changes and the 'structure of foreign trade at home and abroad,they face different real effective exchange rate,so we build the industry real effective exchange rate.The regression results show that:(1)the appreciation of the RMB exchange rate has a significant negative impact for firms'export;(2)the financing constraints influence the relationship between exchange rate changes and firms' exports,financing constraints amplify the negative impact of the appreciation of the RMB exchange rate to firms' exports;(3)different ownership firms have different relationship between exchange rate changes and export:the appreciation of the RMB exchange rate has a significant negative impact for state-owned firms and private firms,but doesn't have a significant impact for the foreign firms;(4)the productivity of firm is higher,the financing constraints is lower and this can be better to offset the negative impact of the appreciation of the RMB exchange rate to firms' exports;(5)the negative impact of the appreciation of the RMB exchange rate to the firms' export which locate in capital-intensive industry is bigger,and the financing constraints of the firm which locate in capital-intensive industry can be worse to offset the negative impact of the appreciation of the RMB exchange rate to firms' exports.