Exchange Rates and Export Structure

This paper studies whether changes in the exchange rate a¤ect a countrys export structure, using an arguably exogenous sudden appreciation of renminbi on July 21, 2005 as the main source of identi\u85cation. Employing combined regression discontinuity and di¤erence-in-di¤erences approach, we show that Chinas export structure became more similar to that of the developed countries after the currency appreciation. We also nd that the majority of the appreciation e¤ect comes from the inter-\u85rm resource reallocation rather than the inter-region or intra-\u85rm resource reallocation