This paper estimates the effect of China's exchange rate changes on exports of developing countries in third markets. The degree of competition between China and its developing country competitors in specific products and destinations plays a key role in the identification strategy. The strategy exploits variation across exporters, importers, products and time—afforded both by disaggregated trade data and bilateral exchange rates—to estimate this "competitor country effect." There is robust evidence of a statistically and quantitatively significant effect. A 10 percent appreciation of China's real exchange rate boosts a developing country's exports at the product level on average by about 1.5-2.5 percent.
Mattoo, Aaditya, Prachi Mishra, and Arvind Subramanian.
"Beggar-Thy-Neighbor Effects of Exchange Rates: A Study of the Renminbi."
American Economic Journal: Economic Policy,
Empirical Studies of Trade
International Monetary Arrangements and Institutions
International Linkages to Development; Role of International Organizations
Development Planning and Policy: Trade Policy; Factor Movement; Foreign Exchange Policy
Socialist Institutions and Their Transitions: International Trade, Finance, Investment, Relations, and Aid