Exchange rate regime preferences of the international sector. Firm-level evidence

This paper argues that fixed exchange rate regimes are preferred by the international sector only if they are adopted in economies endowed with anti-inflationary policy-making institutions (i.e., independent central banks). Cross-national firm-level data gives strong support to this claim.

► Internationally-oriented firms' exchange rate preferences vary across countries. ► Fixed regimes are preferable only if the level of the exchange rate is competitive. ► These firms' preference for pegs is greater when central banks are independent.