Skip to main content

Research Repository

Advanced Search

Imported inputs and invoicing currency choice: theory and evidence from UK transaction data

Chung, Wanyu

Authors

Wanyu Chung



Abstract

A significant proportion of international trade is in intermediate goods. This paper considers theoretically and empirically how exporters' dependence on imported inputs affects their choice of invoicing currency. The model predicts that exporters that depend more on foreign currency-denominated inputs are less likely to price in their home currency. I test this and other theoretical results using a novel dataset that covers UK trade transactions with non-EU countries. I find considerable support for the model's predictions. A 10 percentage point higher share of foreign currency-denominated inputs is associated with a 20 percentage point higher probability of pricing in the same foreign currency relative to the producer's currency.

Citation

Chung, W. (2016). Imported inputs and invoicing currency choice: theory and evidence from UK transaction data. Journal of International Economics, 98, https://doi.org/10.1016/j.jinteco.2015.11.003

Journal Article Type Article
Acceptance Date Nov 9, 2015
Online Publication Date Nov 14, 2015
Publication Date Mar 3, 2016
Deposit Date Jan 22, 2016
Publicly Available Date Mar 29, 2024
Journal Journal of International Economics
Print ISSN 0022-1996
Electronic ISSN 0022-1996
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 98
DOI https://doi.org/10.1016/j.jinteco.2015.11.003
Keywords Currency of invoicing; Imported inputs; UK trade
Public URL https://nottingham-repository.worktribe.com/output/781509
Publisher URL http://www.sciencedirect.com/science/article/pii/S0022199615001579

Files





Downloadable Citations