Abstract:
In this companion paper to Broll and Mukherjee (2017), we empirically analyse how exchange rate volatilities a ect rms optimal production and exporting decisions. The rms elasticity of risk aversion determines the direction of the impact of exchange rate risk on exports. Based on a exible utility function that incorporates
all possible risk preferences, a unique structurally estimable equation is used to estimate the risk aversion elasticities for a panel of Indian service sector (non- nancial) rms over 2004-2015, using the quantile regression method.
