Abstract:    Under the intensified trade friction between China and the US and the impact of the COVID-19, the fluctuation of RMB exchange rate has expand since 2015, so that enterprises will inevitably face obvious export pressure and operational difficulties. On the other hand, enterprise innovation, especially key-core technology innovation, is not only regarded as an important path to enhance its own competitiveness and improve Total Factor Productivity (TFP), but also rises to the height of national strategy, which is related to high-quality economic development and China′s process of modernization. Therefore, the innovation behavior of micro-enterprises, especially the innovation effectiveness of key core technologies, is an important breakthrough to transform the macroeconomic development model and achieve high-quality development. In the face of exchange rate fluctuations, can enterprises continue to maintain innovation motivation, enhance innovation vitality, achieve breakthroughs in key core technologies, and then improve their total factor productivity?Using the data from 49,230 enterprises and 310,000 sets of data matched by China′s industrial enterprise database, customs database and patent database, the paper studied the impact of exchange rate changes on the TFP of enterprises. Based on the analysis framework of the mediation effect, this paper investigated the mediating role of innovation and different critical degrees of innovation in the impact of exchange rate changes on the TFP of enterprises.Based on the above analysis, it was found that: (1) Exchange rate appreciation pushes up the TFP of enterprises, with a 1 standard deviation appreciation of the exchange rate increases the TFP of enterprises by 154%; (2) Enterprise innovation plays an mediating role in the impact of exchange rate on TFP of enterprises, with a mediation degree of 4.54%; (3) There are significant differences in the mediating role of enterprise innovation with different core degrees: the mediating role of non-core technology innovation is the largest, followed by key-core technology innovation, and the mediating role of key-core-invention technology is the least. The main reason for this relationship is that the more the R&D of key core technologies, the more funds, talents and time are invested, and in the face of external shocks, the higher the sunk cost or adjustment cost of terminating or restarting an innovation activity, so the more core technology R&D is, the less affected it is by exchange rate changes.The innovation points are as follows: (1) Key core technical indicators have been constructed. This paper used the text analysis method to build a key core technology thesaurus based on the national science and technology planning of China; (2) The real effective exchange rate of enterprises has been accurately described. This paper took the trade amount between enterprises and countries as the weight, and the bilateral exchange rate have been weighted to obtain the enterprise-level real effective exchange rate (REER), which is conducive to more detailed capture of the impact of exchange rate changes on enterprise innovation and productivity; (3) Large number of samples have been analyzed to ensure robustness of results. This paper used the matching data from China′s industrial enterprise database and customs database as samples, with a data volume of more than 300,000, covering all fields of industrial enterprises, to ensure the universality and reliability of the research conclusions. (4) A unified analytical framework for exchange rate, enterprise innovation and TFP has been constructed, and the meditating analysis method has been used to examine the mediation role of enterprise innovation and key core technology innovation, to better identify the impact and channel of exchange rate`s influence on productivity.This paper put forward the following policy implications: First, the more the key-core technology, the greater the promotion effect on the total factor productivity of enterprises. Therefore, differentiated fiscal subsidies and preferential tax policies should be given according to technological innovations of different core levels; Second, the R&D of key core technologies often has the characteristics of large capital demand and long R&D cycle, among which financing constraints. Therefore, government must further deepen the multi-level capital market construction, develop intellectual property financial tools, introduce "financial living water" as "precision irrigation" for enterprise R&D, realize the transformation from "intellectual property" to "asset" of enterprises, and strengthen its concentration and endurance of key core technological innovation. Third, we should continue to deepen the reform of the exchange rate system, reduce the barriers to foreign exchange transactions for micro entities, and make the exchange rate truly reflect market supply and demands.

Key words: exchange rate change, key core technology, total factor productivity, moderated mediation effect