Gilles Dufrénot: gilles.dufrenot[at]sciencespo-aix.fr
Kiyotaka Sato: sato[at]ynu.ac.jp
This study examines determinants of the invoice currency with a focus on the effect of export experience based on the questionnaire survey for Japanese small and medium enterprises (SMEs) in the manufacturing industry. We find that exporters with long experience in exporting tend to switch the invoice currency from Japanese yen to foreign currencies. The interpretation is that export experience provides firms with the know how to deal with the exchange rate risk and enables firms to use foreign currencies in their exports. This effect survives even if firms intermittently export from their first exports. We also find that the yen is more likely to be chosen in the first export when the age of the exporter is higher, the sales value of the exporter is smaller, the exporter has an initiative in the determination of the invoice currency and the exporter started exporting before the global financial crisis in 2007.