The Uncertainty Of Real Exchange Rate And Technological Progress

On the basis of reviewing the mutual relationship between the uncertainty of real exchange rate and technological progress,this paper promotes a theoretical framework in which the uncertainty of real exchange rate plays a key role.This paper finds that uncertainty of real exchange rate has the non-linear relationship with technological progress.According to the existing literature and the characteristics of the research,the mechanisms will be explained as the direct effect,the structural adjustment effect and the technological spillover effect.First of all,from the direct effect,the risks of exchange rate volatility directly affect the export trade and foreign direct investment and then the country's?region's? technological progress by increasing export costs.And the enhancement of the uncertainty can affect technological progress by influencing multinational FDI inflows.Secondly,from the structural adjustment effect,the uncertainty of exchange rate volatility can adjusts the trade structure and the structure of foreign direct investment.The uncertainty of exchange rate improves productivity through internal trade structure upgrading.Meanwhile,the exchange rate uncertainty adjusts the structure of FDI,but the direction and degrees depend on the different type of FDI.Finally,from the technological spillover effect,the uncertainty of currency fluctuations can also have the technological spillover effect on export trade and foreign direct investment and then a country's?region's? technological progress.For export trade,technological spillover effect can be both positive and negative;and the exchange rate uncertainty can spill over the technology from FDI to influence a country's?region's? technological progress.Therefore,the uncertainty of exchange rate comprehensively perform the three channels of the direct effect,the structural adjustment effect and the technology spillover effect to influence a country's?region's? technological progress.In the empirical part,this paper respectively uses two different datasets.On macro multinational panel data,we pay attention on different degrees of the uncertainty of real exchange rate influencing technological progress.We try to verify that on the macro level the real exchange rate volatility plays the key role in technological progress.Then we turn to a more micro level,in order to further examine the applicability of the theory in China and the perspective of more microscopic validation about the mechanism of the uncertainty of RMB real effective exchange rate on enterprises technological progress.In this paper,we use the matching data from Chinese industrial enterprises database and custom micro database for the purpose of the empirical test.In the end,based on theoretical and empirical analysis,this paper gets the main conclusions and related policy suggestions.