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<p>This paper investigates the determinants of international trade invoicing by quantifying the relative importance of structural relationships, global currency dynamics, and country-specific developments. Using a comprehensive dataset for 132 countries from 1990–2024 that includes the US dollar, the euro, and the Chinese renminbi, a multi-dimensional fixed effects model is used to disentangle these three forces. A subsequent variance decomposition analysis is further used to assess their relative explanatory power. The empirical results suggest that invoicing patterns are overwhelmingly determined by time-invariant, country-currency specific structural factors, which explain approximately 60% of the total variation. Global, currency-specific trends account for another 30%, while idiosyncratic, country-specific developments have a surprisingly minimal impact, explaining less than 10%. Our results reveal a global invoicing system characterized by immense inertia, suggesting that national policies are likely insufficient on their own in altering invoicing behavior without fundamentally changing a country’s deep-seated integration into the global trade and financial network. Important policy suggestions follow.</p>

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Accounting for the patterns of invoicing currency in global trade

  • 期刊论文

  • 发表日期：

    2026年2月24日

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  • Hakan Yilmazkuday

摘要

This paper investigates the determinants of international trade invoicing by quantifying the relative importance of structural relationships, global currency dynamics, and country-specific developments. Using a comprehensive dataset for 132 countries from 1990–2024 that includes the US dollar, the euro, and the Chinese renminbi, a multi-dimensional fixed effects model is used to disentangle these three forces. A subsequent variance decomposition analysis is further used to assess their relative explanatory power. The empirical results suggest that invoicing patterns are overwhelmingly determined by time-invariant, country-currency specific structural factors, which explain approximately 60% of the total variation. Global, currency-specific trends account for another 30%, while idiosyncratic, country-specific developments have a surprisingly minimal impact, explaining less than 10%. Our results reveal a global invoicing system characterized by immense inertia, suggesting that national policies are likely insufficient on their own in altering invoicing behavior without fundamentally changing a country’s deep-seated integration into the global trade and financial network. Important policy suggestions follow.