TY - BOOK ID - 84659324 TI - Determinants of Firm Profitability in Colombia’s Manufacturing Sector : Exchange Rate or Structural? PY - 2015 SN - 1475579608 1475518560 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Foreign exchange rates -- Colombia. KW - Manufacturing industries -- Colombia. KW - Structural adjustment (Economic policy) -- Colombia. KW - Industries KW - Business & Economics KW - Exports and Imports KW - Foreign Exchange KW - Industries: Manufacturing KW - Firm Performance: Size, Diversification, and Scope KW - Industry Studies: Manufacturing: General KW - Industrialization KW - Manufacturing and Service Industries KW - Choice of Technology KW - Development Planning and Policy: Trade Policy KW - Factor Movement KW - Foreign Exchange Policy KW - Trade: General KW - Currency KW - Foreign exchange KW - Manufacturing industries KW - International economics KW - Real effective exchange rates KW - Manufacturing KW - Real exchange rates KW - Imports KW - Exports KW - Economic sectors KW - International trade KW - Colombia UR - https://www.unicat.be/uniCat?func=search&query=sysid:84659324 AB - The appreciation of the real exchange rate over the past several years is considered one of the key drivers behind the weak performance of Colombia’s manufacturing sector in recent years. This paper examines the effects of the real exchange rate, external and domestic demand, and structural changes on firms’ profitability in Colombia’s manufacturing sector between 2000 and 2012. While export intensive companies have suffered lower profit growth with real exchange rate appreciation,we find no strong evidence that real appreciation has, on average, negatively affected the profitability of manufacturing firms; on the contrary, we find that real appreciation may have increased firms’ profitability by reducing the cost of imported inputs as Colombian manufacturing firms become more domestically oriented. At the same time, some structural changes (related to trade disruption with Venezuela and increased trade competition from China) seem to partially explain the weakness of the manufacturing sector since 2008. ER -