EFFECTS OF EXCHANGE-RATE RISK ON EXPORTS - CROSS-COUNTRY ANALYSIS

In this paper we investigate the effects of exchange tate uncertainty on the aggregate exports of 19 developed and 67 developing countries using cross-sectional data. Exchange rate uncertainty is found to be detrimental to the exports of both developing and developed countries. Developed countries' exports, however, are found to be less sensitive to exchange risk than that of developing countries. Furthermore, within the developing countries, those who fixed their exchange rates to one major currency were found to be subject to less risk than the other developing countries.