scholarly journals The impact of CHF/EUR exchange rate uncertainty on Swiss exports to the Eurozone: evidence from a threshold VAR

2019 ◽  
Author(s):  
Julius Loermann
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Uncertainty ◽  
The Impact

scholarly journals Investment and exchange rate uncertainty under different regimes

2014 ◽  
Vol 44 (3) ◽  
pp. 553-577
Author(s):  
Cristiano Aguiar de Oliveira
Keyword(s):  
Exchange Rate ◽  
Real Option ◽  
Investment Decision ◽  
Exchange Rate Regimes ◽  
Significant Loss ◽  
Project Investment ◽  
Foreign Markets ◽  
Exchange Rate Uncertainty ◽  
Regime Stability ◽  
The Impact

This paper examines the impact of the exchange rate uncertainty on investment under different exchange rate regimes. The paper presents a theoretical model where exchange rate is a stochastic process and investment decision behaves as a Real Option. The paper evaluates the performance of a new project investment under free float, fixed and intermediate exchange rate regimes (managed float and crawling peg). The comparison among the different regimes shows that the crawling peg has advantages when compared to other regimes. The regime stability implies that less currency devaluations are necessary to stimulate investment, especially when there is a significant loss of market power in foreign markets.

The Impact of Exchange Rate Uncertainty on the Level of Investment

1999 ◽  
Vol 109 (454) ◽  
pp. 55-67 ◽  
Author(s):  
Julia Darby ◽  
Andrew Hughes Hallett ◽  
Jonathan Ireland ◽  
Laura Piscitelli
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Uncertainty ◽  
The Impact

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.

The Impact of Regret on Exports

2016 ◽  
Vol 17 (2) ◽  
pp. 192-205
Author(s):  
Udo Broll ◽  
Kit Pong Wong ◽  
Peter Welzel
Keyword(s):  
Exchange Rate ◽  
Risk Premium ◽  
Optimal Allocation ◽  
Risk Averse ◽  
Exchange Rate Uncertainty ◽  
Export Decisions ◽  
Ex Post ◽  
Spot Exchange Rate ◽  
Regret Aversion ◽  
The Impact

Abstract We examine optimal production and export decisions of a firm facing exchange rate uncertainty, where the firm’s management is not only risk averse but also regret averse, i.e., is characterized by a utility function that includes disutility from having chosen ex post suboptimal alternatives. Experimental and empirical results support the view that managers tend to be regret averse. Under regret aversion a negative risk premium need not preclude the firm from exporting which would be the case if the firm were only risk averse. Exporting creates an implicit hedge against the possibility of regret when the realized spot exchange rate turns out to be high. The regret-averse firm as such has a greater ex ante incentive to export than the purely risk averse firm. Finally, we use a two-state example to illustrate that the firm optimally exports more (less) to the foreign country than in the case of pure risk aversion if the low (high) spot exchange rate is more likely to prevail. Regret aversion as such plays a crucial role in determining the firm’s optimal allocation between domestic sales and foreign exports.

scholarly journals The Impact of Risk and Uncertainty On Remittances Into Latin American Economies

1970 ◽  
Vol 26 (1) ◽  
pp. 99-118
Author(s):  
Blen Solomon
Keyword(s):  
Exchange Rate ◽  
Latin American ◽  
Political Risk ◽  
Risk And Uncertainty ◽  
Exchange Rate Uncertainty ◽  
Political Environments ◽  
The Impact ◽  
Latin American Countries

This study investigates the effects of exchange rate uncertainty and politicalrisk, after controlling for the conventional macroeconomic detenninants, on remittancestransfers into eight Latin American countries during the period of 1990-2006.The results suggest that an increase in exchange rate uncertainty reduces remittancesflows into these countries. Furthennore, an increase in political risk seems to havea negative but statistically insignificant impact on remittances transfers. Based onthe findings of this paper, we can say that governments of the remittance receivingcountries can influence the inflow of remittances by means of adopting appropriatemacroeconomic policies to reduce exchange rate uncertainty and also by improvingtheir political environments.

scholarly journals The impact of exchange rate uncertainty on exports: a panel VAR analysis

2020 ◽  
Vol 47 (2) ◽  
pp. 157-192
Author(s):  
Leonel Muinelo-Gallo ◽  
Ronald Miranda Lescano ◽  
Gabriela Mordecki
Keyword(s):  
Exchange Rate ◽  
Panel Var ◽  
Exchange Rate Uncertainty ◽  
Var Analysis ◽  
The Impact
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