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The Euro as Invoicing Currency in International Trade
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In this paper, the authors investigated the determinants of currency invoicing in international trade and found that a country's membership or prospective membership of the EU plays a decisive role in the choice of the euro as a currency.Abstract:
This paper investigates the determinants of currency invoicing in international trade. Although the currency of invoicing is central for the transmission of monetary policy, empirical research on this topic is scarce due to a lack of data. With a new extensive invoicing dataset and a panel model analysis this paper shows that a country’s membership or prospective membership of the EU plays a decisive role in the choice of the euro as invoicing currency. The role of the euro as vehicle currency is increasing but still limited when compared to the U.S. dollar. Monetary instability and low product differentiation favour vehicle pricing in U.S. dollar. An increase of euro invoicing due to higher exchange rate volatility supports the role of the euro as vehicle currency, however. High market power defined as the share of a country’s total exports to world exports and membership of the euro area make invoicing in the home currency (euro) more likely.read more
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Networks versus Markets in International Trade
TL;DR: In this article, the authors propose a network/search view of international trade in differentiated products and present evidence that supports the view that proximity and common language/colonial ties are more important for differentiated products than for products traded on organized exchanges in matching international buyers and sellers.
Journal ArticleDOI
Networks versus markets in international trade
TL;DR: In this paper, the authors propose a network/search view of international trade in differentiated products and present evidence that supports the view that proximity and common language/colonial ties are more important for differentiated products than for products traded on organized exchanges in matching international buyers and sellers.
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