The Impact of Real Exchange Rate Movements on Service Sector Firms
Bibliographic record
Abstract
There is a growing literature addressing the effect of exchange rate movements on the survival and performance of manufacturing firms. With international trade in services expanding tremendously, the international environment is also becoming increasingly important to service sector firms. To date, however, the implications of the international economy for firms in the service sector are vastly understudied. This paper sets out to investigate this important, yet unexplored, issue. We analyze the effects of industry specific real exchange rate movements on the profitability, survival, sales and leverage of Canadian service sector firms. We use firm level data from 1986 to 1997 combined with service trade data from 1990 to 2005. Our empirical results show that real appreciations of the Canadian dollar reduce firm probability of survival, sales and profitability while depreciations have the opposite effect. Leverage decreases with appreciations and increases with depreciations. This paper is among the first in the literature that analyze the impact of exchange rate movements on the behaviour of service firms. Overall, our findings suggest a significant exchange rate effect on service firms and the direction of which is similar to that for manufacturing firms.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.010 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.000 | 0.001 |
| Scholarly communication | 0.002 | 0.001 |
| Open science | 0.000 | 0.001 |
| Research integrity | 0.001 | 0.001 |
| Insufficient payload (model declined to judge) | 0.003 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".