Abstract:
Based on the firm-level micro data and highly disaggregated customs data from 2000 to 2007, this paper investigates the effects of RMB real effective exchange rate on Chinese manufacturing enterprises’ productivity. The results show that:(1) RMB real effective exchange rate appreciation has a positive net effect through capital and labor elements allocation effect, companies selection effect, scale economy effect and human capital enhancement effect on the manufacturing enterprises’ productivity, and the conclusion remains robust after the use of several tools to solve problems of endogenous variables; (2) The effects of RMB real effective exchange rate on enterprises’ productivity are significantly different among firms with different characteristics, including whether firms export or not, different mode of trade, different technology level and different ownership of enterprises; (3) As a factor that restrict the effect of RMB exchange rate on enterprises’ productivity, the stronger the enterprise financing ability, the greater the positive impact of RMB exchange rate on firms’ productivity.
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