International use of the renminbi for invoice currency and exchange risk management: Evidence from the Japanese firm-level data
Document Type
Journal Article
Publication Title
The North American Journal of Economics and Finance
Publisher
Elsevier
Place of Publication
Netherlands
School
School of Business and Law
RAS ID
29423
Abstract
The use of the Chinese renminbi (RMB) is said to have been increasing in recent years for trade invoicing, due to active promotion policies implemented by the Chinese government. However, only patchy information has been presented in the literature on the use of RMB in Chinese trade. Using the information obtained from two-round, large-scale questionnaire surveys, this paper presents new evidence on the use of RMB and exchange risk management by Japanese subsidiaries operating in China and other Asian countries. We find that Japanese subsidiaries in China mainly use the U.S. dollar, and to a lesser extent, the yen in trade with other countries. However, they increase the use of RMB in intra-firm trade with Japan. The result of Logit estimation indicates that RMB transactions will grow further if overseas subsidiaries have more discretion in exchange rate risk management. Removing capital controls on onshore RMB (CNY) market is another necessary condition to promote RMB internationalization.
DOI
10.1016/j.najef.2018.04.013
Access Rights
subscription content
Comments
Sato, K., & Shimizu, J. (2018). International use of the renminbi for invoice currency and exchange risk management: Evidence from the Japanese firm-level data. The North American Journal of Economics and Finance, 46, 286-301. Available here.