scholarly journals Sensitivity of CESEE countries' export of differentiated products to exchange rate changes

Industrija ◽  
2020 ◽  
Vol 48 (3) ◽  
pp. 7-26
Author(s):  
Aleksandra Đorđević-Zorić
Keyword(s):  
Exchange Rate ◽  
Bilateral Trade ◽  
Negative Impact ◽  
Exchange Rate Volatility ◽  
Value Added ◽  
Differentiated Products ◽  
Average Impact ◽  
Exchange Rate Changes ◽  
The Impact ◽  
The Relationship

The research aims to examine the effects of exchange rate changes on the value of bilateral export of differentiated products in the selected CESEE countries, while controlling the impact of traditional gravity variables. Identifying the determinants that affect the export of high value-added products is of particular importance for this group of countries, while analyzing the effects of exchange rate changes is a contribution to the previous researches. In order to comprehensively understand the relationship between the observed variables, a quantile panel regeression was used to estimate the gravity equation. Examining the heterogeneity of the impact of exchange rate changes and other selected trade factors along the export distribution is another contribution of the paper, given that bilateral trade researches are usually based on assessing the average impact. The results indicate that the CESEE countries' export of differentiated products is significantly influenced by exchange rate changes. Exchange rate volatility has a negative impact, which grows at higher levels of export. The heterogeneity of the impact depending on export level was also confirmed for other determinants discussed in the paper.

scholarly journals THE IMPACT OF EXCHANGE RATE VOLATILITY ON ECONOMIC GROWTH IN NIGERIA: A DYNAMIC ECONOMETRIC APPROACH

2021 ◽  
pp. 16-40
Author(s):  
Comfort Akinwolere Bukola ◽  
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Time Series Data ◽  
Negative Impact ◽  
Positive Impact ◽  
Exchange Rate Volatility ◽  
Series Data ◽  
Balance Of Trade ◽  
Econometric Approach ◽  
The Impact

This study examined the impact of exchange rate volatility on economic growth in Nigeria. The study covers the period of 1986 to 2019. Using time series data, the methodology adopted is the Vector Error Correction Mechanism to explore the impact of exchange rate volatility on the selected macroeconomic variables. The result indicated that exchange rate volatility has a significant impact on economic growth, specifically it has a positive impact on inflation, unemployment and balance of trade. On the other hand it has a negative impact on economic growth and investment. The recommendations made include; that relevant authorities should try to avoid systematic currency devaluations in order to maintain exchange rate volatility at a rate that allows adjustment of the balance of payments.

THE ASYMMETRIC IMPACT OF RER-MISALIGNMENT ON ECONOMIC GROWTH: AN APPLICATION OF HODRICK–PRESCOTT FILTER TECHNIQUE

2021 ◽  
pp. 1-29
Author(s):  
GHOSIA AYAZ ABBASI ◽  
D. JAVED IQBAL
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Negative Impact ◽  
Asymmetric Effect ◽  
Nonlinear Ardl ◽  
Long Run ◽  
Exchange Rate Misalignment ◽  
Asymmetric Impact ◽  
Exchange Rate Changes ◽  
The Impact

Previous studies that examined the impact of exchange rate misalignment on economic growth were based on the symmetric approach where both overvalued and undervalued exchange rates were supposed to affect the economic growth in a similar way. However, in recent years, a number of studies have established that exchange rate changes affect the trade flows in an asymmetric way. Hence, this study investigates the asymmetric effect of exchange rate misalignment on the economic growth of Pakistan. The findings of the study indicate that in the case of the symmetric approach, exchange rate misalignment has a negative impact on economic growth. However, after applying the nonlinear ARDL approach, the study finds significant evidence in favor of the asymmetric effect of exchange rate misalignment on economic growth. Interestingly, the results indicate that undervaluation spurs while over-valuation hampers the economic growth in Pakistan. The study recommends that though under-valued exchange rate may have temporary relief for the economy, yet in the long run, a market-based equilibrium exchanger rate is imperative for a developing economy like Pakistan.

scholarly journals The relationship between exchange rates and international trade: a literature review

2013 ◽  
Vol 12 (3) ◽  
pp. 577-605 ◽  
Author(s):  
MARC AUBOIN ◽  
MICHELE RUTA
Keyword(s):  
International Trade ◽  
Exchange Rate ◽  
Exchange Rates ◽  
Small Firms ◽  
Exchange Rate Volatility ◽  
Production Networks ◽  
Global Production Networks ◽  
Long Run ◽  
The Impact ◽  
The Relationship

AbstractThis paper surveys a wide body of economic literature on the relationship between exchange rates and trade. Specifically, two main issues are investigated: the impact of exchange rate volatility and of currency misalignments on international trade flows. On average, exchange rate volatility has a negative (even if not large) impact on trade. The extent of this effect depends on a number of factors, including the existence of hedging instruments, the structure of production (e.g. the prevalence of small firms), and the degree of economic integration across countries. The second issue involves exchange rate misalignments, which are predicted to have short-run effects in models with price rigidities. However, the exact impact depends on a number of features, such as the pricing strategy of firms engaging in international trade and the importance of global production networks. Trade effects of currency misalignments are predicted to disappear in the long-run, unless an economy is characterized by other relevant distortions. Empirical results broadly confirm these theoretical predictions.

scholarly journals MIXTURE DISTRIBUTION HYPOTHESIS AND THE IMPACT OF A TOBIN TAX ON EXCHANGE RATE VOLATILITY: A REASSESSMENT

2015 ◽  
Vol 20 (6) ◽  
pp. 1600-1622 ◽  
Author(s):  
Olivier Damette
Keyword(s):  
Exchange Rate ◽  
Trading Volume ◽  
Exchange Rate Volatility ◽  
Mixture Distribution ◽  
Smooth Transition ◽  
Tobin Tax ◽  
Turbulent Times ◽  
The Impact ◽  
The Relationship

This paper applies smooth transition regressions to incorporate nonlinearity into the impact of trading volume on exchange rate volatility, the so-called mixture distribution hypothesis (MDH). Linking this analysis to the Tobin tax debate, we provide the first empirical corroboration that such a tax may be effective in limiting speculation and reducing exchange rate volatility, especially in turbulent times. Our study points to two main results. First, we show that nonlinearities should be taken into account to explain the MDH. When volatility, spreads, and volume are simultaneously high, the relationship between trading volume and volatility tends to grow stronger and thus the MDH holds in turbulent periods. Second, on the assumption of constant trading volume elasticity, a Tobin tax would have been stabilizing and effective in the 2008 crisis.

scholarly journals Effect of exchange rate uncertainty on bilateral trade performance in SAARC countries: a gravity model analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Banna Banik ◽  
Chandan Kumar Roy
Keyword(s):  
Exchange Rate ◽  
Panel Data ◽  
Gravity Model ◽  
Bilateral Trade ◽  
Exchange Rate Volatility ◽  
Exchange Rate Uncertainty ◽  
Content Type ◽  
Estimation Techniques ◽  
Trade Performance ◽  
The Impact

PurposeExchange rate uncertainty leads to an indecisive environment for imports and exports that would condense international trade, foreign direct investment, trade earnings, trade volumes, economic growth and welfare. This study aims to examine, empirically, the effect of exchange rate uncertainty on bilateral trade performance, focusing on eight SAARC member economies using the popular modified gravity model of trade.Design/methodology/approachThe paper includes eight SAARC members – Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka panel data set over the period 2005–2018. The authors consider both standardized value (standard deviation) and conditional variance model to determine volatility of exchange rate. Primarily, ordinary least squares, random effects and fixed effects estimation techniques are employed to investigate the impact of exchange rate volatility. Endogeneity and robustness of the findings have been tested using the simultaneity-adjusted model and dynamic panel data two-step system GMM estimation techniques.FindingsEmpirical findings endorse the view that exchange rate volatility lowers trade flows in the SAARC regions. However, this adverse effect of exchange rate uncertainty on trade is pretty small. The negative correlation between exchange rate volatility and bilateral trade remains consistent and significant after controlling of simultaneous causality, autocorrelation, year effects, country-pair heterogeneity and endogeneity irrespective of panel data estimation techniques and different measures of volatility.Originality/valueThe present paper is original work.

scholarly journals Exchange Rate Volatility and Import Trade Flow Evidence From India-U.S. at Industry Level

2021 ◽  
Vol 12 (3) ◽  
pp. 1-21
Author(s):  
Mohini Gupta ◽  
Sakshi Varshney
Keyword(s):  
Exchange Rate ◽  
Trade Flow ◽  
Exchange Rate Volatility ◽  
Long Run ◽  
Short Run ◽  
Import Trade ◽  
The Impact ◽  
The Relationship ◽  
Autoregressive Conditional Heteroscedasticity ◽  
The Empirical Analysis

The centre interest of the study is to explore the impact of exchange rate volatility on the India-U.S. trade flow of Import on 6 industries spanned from September 2002 to June 2019. We investigate the relationship at disaggregate level by industry-wise data with monthly frequency. We employ exponential generalized autoregressive conditional heteroscedasticity (E-GARCH) model to gauge volatility and thereafter ARDL bound testing approach to unveil the short and long-run association of real exchange rate volatility and import. The empirical analysis implies the existence of both short-run and long-run effect in 5 importing industries except manufactured (engineering) goods. While real exchange volatility appears to have statistically significant effect in short-run, but also estimated short-run lasts onto long-run effect in only three industries. The results confirm the information of import in time-series analysis. The finding of the study helps to undertake the view of invariability and considering the industry before policy making.

scholarly journals Does Economic Integration Affect the Co-movement between Financial Markets? Evidence from Pakistani equity market with its global partners

2020 ◽  
Vol 4 (3) ◽  
pp. 137-158
Author(s):  
Ahmad Fraz ◽  
Arshad Hassan ◽  
Sumayya Chughtai
Keyword(s):  
Exchange Rate ◽  
Financial Crisis ◽  
Bilateral Trade ◽  
Negative Impact ◽  
Equity Market ◽  
Bilateral Exchange ◽  
Economic Fundamentals ◽  
International Portfolio Diversification ◽  
Trading Partners ◽  
The Impact

The study investigates the impact of bilateral trade, economic fundamentals and financial crisis on the equity market integration (EMI) of Pakistan’s equity market with its major global trading partners (China, India, USA and UK) for the period 1998 to 2016. The findings of the study indicate that bilateral trade and economic conditions have a significant impact on EMI, the export dependence of two economies may increase the EMI and import dependence reduces the EMI of two economies. Moreover, inflation differential and volatility in the bilateral exchange rate have a negative impact on EMI. It implies that inflation rates in Pakistan’s equity market are higher as compare to other markets and volatility in bilateral exchange rate may reduce trade flows and its tendency to follow other market (Bracker, Docking , & Koch, 1999). Furthermore, the financial crisis in an economy may reduce the EMI with its trading partners and EMI between different markets is affected by their bilateral economic fundamentals. The results imply that financial integration between different markets is affected by their bilateral economic fundamentals. The study has strong implications for international investors who need to assess risks and benefits associated with international portfolio diversification.

scholarly journals Volatility Exchange Rate and Economic Growth: Insight from ASEAN Member Countries

2021 ◽  
Vol 68 (4) ◽  
pp. 495-507
Author(s):  
Gatot Nazir Ahmad ◽  
Haryo Kuncoro ◽  
Harmuzan Tazril ◽  
Dicky Iranto
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Sample Selection ◽  
Exchange Rate Volatility ◽  
Financial Report ◽  
Asean Member ◽  
Exchange Rate Movements ◽  
Primary Focus ◽  
Exchange Rate Changes ◽  
The Impact

This study aims to determine the effect of exchange rate volatility on economic growth in the ASEAN member countries (Indonesia, Thailand, Vietnam, and Cambodia) through investment. Based on the previous studies, the researcher focuses on developing the initial research analysis because it can control different company levels' characteristics and then determine the impact of exchange rate changes on economic growth mediated by investment. There is a limited analysis of whether exchange rate movements encourage overall investment in this study's particular direction. The author's primary focus is whether the export or import channels or both play an essential role in determining a company's investment. This study's population is in ASEAN member countries that have been published by the World Bank (https://www.worldbank.org/) and continue to exist during the period 1998-2019. The sample selection in this study used a purposive sampling method. Some of the ratio data were available in the financial report summary. The analysis method used in the study is the path analysis.

The impact of corporate governance on intellectual capitals efficiency in Iran

2020 ◽  
Vol 13 (4) ◽  
pp. 749-766 ◽  
Author(s):  
Mahmoud Lari Dashtbayaz ◽  
Mahdi Salehi ◽  
Alieyh Mirzaei ◽  
Hamideh Nazaridavaji
Keyword(s):  
Corporate Governance ◽  
Human Capital ◽  
Audit Committee ◽  
Negative Impact ◽  
Stock Exchange ◽  
Value Added ◽  
Content Type ◽  
Financial Expertise ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this study is to evaluate the impact of corporate governance on intellectual capital (IC) in companies listed on the Tehran stock exchange. Design/methodology/approach In this paper, the board features (size, independence and CEO duality) and the characteristics of the audit committee (financial expertise, independence and size) are considered to measure the factors of corporate governance. The IC is also divided into communicative, human, structural and value-added IC. Research data are gathered using a sample of 132 companies during 2013-2016. Research hypotheses are analyzed using panel data and logistic regression models. Findings The findings indicate that while the board’s independence, financial expertise and the size of the audit committee are negatively related to the communicative capital, the relationship between audit committee independence and communicative capital is positive and significant. Further, the authors observe that there is a positive relationship between board independence and human capital, a negative and significant link between audit committee size and human capital. By the way, the results reveal that audit committee independence and audit committee size have, respectively positive and negative impact on structural capital. Originality/value The results of the current study may give more insight into the relationship between corporate governance and managerial capital in developing nations.

scholarly journals The impact of exchange rate volatility on trade: The evidence from Russia

2021 ◽  
Vol 7 (3) ◽  
pp. 213-232
Author(s):  
Irina Tarasenko
Keyword(s):  
Exchange Rate ◽  
Negative Impact ◽  
Raw Materials ◽  
Exchange Rate Volatility ◽  
Nominal Exchange Rate ◽  
Transport Equipment ◽  
Product Categories ◽  
Trading Partners ◽  
Manufactured Goods ◽  
The Impact

This paper analyzes the effects of exchange rate volatility on exports and imports of a range of goods between Russia and its 70 trading partners from 2004 until 2018. The goods in question fall into eight product categories, as follows: (i) agricultural raw materials­; (ii) chemicals; (iii) food; (iv) fuels; (v) manufactured goods; (vi) ores and metals­; (vii) textiles; and (viii) machinery and transport equipment. Exchange rate volatility­ is measured using the standard deviation of the first difference in the logarithmic daily nominal exchange rate. The paper concludes that exchange rate volatility had a negative impact on exports of agricultural raw materials, manufactured goods, and machinery and transport equipment. In contrast, it was found to have a positive and significant impact on trade in fuels and imports of chemicals and textiles.

Sign in / Sign up

Export Citation Format

Share Document