Invoicing currency choice: Preliminary evidence from French firm-level data — Sonali Chowdhry

Sprecherin

Sonali Chowdhry (Kiel Institute)

Abstract

This paper examines firm-specific determinants of the choice of invoicing currency in international trade. Using highly disaggregated customs data from France spanning 2011-2017, it provides new stylised facts on the selection of firms into local currency pricing (LCP) and the dynamics of LCP across and within firms. In doing so, the paper contributes to the growing literature on the exchange rate risk management of trading firms. The firm-level evidence presented also holds policy implications for the transmission of trade shocks across borders and efforts by Central Banks to promote the use of local currencies for settlements.

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