R&D as a Source of the Resilience for Exporting Firms in the Face of Large Exchange Rate Movements

Bibliographic Data

ID6417464
AuthorsWalid Hejazi (0000-0003-3596-5147, University of Toronto), Jianmin Tang (0000-0002-9257-1411, Innovation, Science, and Economic Development Canada, Ottawa, Ontario, Canada), Weimin Wang (0000-0002-4789-6399, Statistics Canada, Ottawa, Ontario, Canada)
Year2025
Volume51
Issue2
Pages207-230
Publication date2025-05-09
Open AccessNo
TypeARTICLE
VenueCanadian Public Policy (JOURNAL)
Journal identifiersISSN: 0317-0861 • E-ISSN: 1911-9917
PublisherUniversity of Toronto Press Inc. (UTPress) (PUBLISHER)
DOI10.3138/cpp.2024-048
OpenAlexW4410232087
LanguageEN
References cited24

The Canadian dollar has experienced large movements in value against the U.S. dollar and other major currencies, thus creating significant strategic challenges for Canadian exporters. More specifically, when the Canadian dollar is devalued, exporters may depend on low export costs as their source of competitive advantage. However, when the value of the Canadian dollar is appreciated, innovation and product quality are more important to justify higher costs to foreign importers. Firm-level R&D investments enable the development of innovative and distinctive products, which improves exporters’ ability to compete in global markets in the face of an appreciated currency and serves as a source of resilience for exporters in the face of unfavourable exchange rate movements. Using Canadian microdata on firms operating within Canadian goods-producing industries over 2005 to 2019, this article provides evidence in support of these hypotheses

Business · Economics · Exchange rate · Face (sociological concept · Monetary economics · Physics · Resilience (materials science · Sociology · Firm Innovation and Growth · Global trade and economics · International Business and FDI · Finance

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