TITLE:
Does the Depreciation of RMB Exchange Rate Inhibit the Innovation of Export Enterprises?
AUTHORS:
Guohui Yang
KEYWORDS:
RMB Exchange Rate, Enterprise Innovation, Investment Motivation, Capital Chasing Interest
JOURNAL NAME:
Modern Economy,
Vol.9 No.2,
February
28,
2018
ABSTRACT: Based on the sample of Chinese A-share listed
companies from 2011-2016, this paper examines the impact of RMB exchange rate
depreciation on enterprise innovation from the perspective of investment
motivation. The study found that the devaluation of the RMB exchange rate
significantly inhibited the innovation of export enterprises. In the sample of
export enterprises, this paper uses OLS regression to find that RMB devaluation
significantly inhibits the innovation of export enterprises. Further study on
the exporting enterprises group found that this conclusion is only significant
in the sub-sample of private enterprises, small scale enterprises and
enterprises with high industry competition degree. Because these enterprises
have a stronger motivation to pursue profits, in case that the depreciation of
RMB exchange rate is conducive to exports, they are more likely to increase
their investment in production in order to expand their exports, ignoring
innovation investment. This shows that the
export enterprises are in the face of the short-term profit-making
opportunities arising from the devaluation of the RMB, and the
weakening of motivation for investment innovation is the mechanism of devaluation
of the RMB to curb
enterprise innovation. Finally, in the robustness test, this paper considers
the lagging effect of RMB depreciation, and replaces the innovation index of
enterprises, and the results are still consistent with the main regression
results.