On the asymmetric effects of exchange rate uncertainty on China’s bilateral trade with its major partners

2022 ◽  
Author(s):  
Jia Xu ◽  
Mohsen Bahmani-Oskooee ◽  
Huseyin Karamelikli
Keyword(s):  
Exchange Rate ◽  
Bilateral Trade ◽  
Exchange Rate Uncertainty ◽  
Asymmetric Effects

Asymmetric Exchange Rate Effects on Cross-Border Freight Flows between the United States and Canada

2020 ◽  
Vol 2674 (4) ◽  
pp. 348-361
Author(s):  
Junwook Chi
Keyword(s):  
Exchange Rate ◽  
Linear Models ◽  
Bilateral Trade ◽  
Nonlinear Models ◽  
Exchange Rate Volatility ◽  
The United States ◽  
Trade Flows ◽  
Asymmetric Effects ◽  
Cross Border ◽  
Long Run

This paper investigates possible asymmetric influences of the exchange rate on cross-border freight flows between the U.S.A. and Canada. Linear and nonlinear autoregressive distributed lag models are used to test for the existence of long-run asymmetric effects of 1) currency appreciation and depreciation and 2) exchange rate volatility changes on trade flows by truck, rail, air, vessel, and pipeline. This paper provides evidence that both currency value and exchange rate volatility affect the U.S.–Canada freight flows in an asymmetric manner. The long-run results of the nonlinear models show that exchange rate is found to be significantly associated with the bilateral trade flows between the U.S.A. and Canada. Exchange rate volatility tends to be significantly associated with trade flows in the nonlinear models, while its effects are insignificant in most cases in the linear models. These findings suggest that the conventional linear specification may mislead the asymmetric effects of exchange rate uncertainty on cross-border freight flows. It is also found that exchange rate sensitivities of U.S.–Canada trade flows by transport mode can differ significantly from those of aggregate trade flows. The information derived from disaggregate trade data can be useful for traders and shippers to develop a long-term strategic plan for infrastructure investment and service expansion.

Exchange-Rate Volatility and Industry Trade Between Japan and China

2012 ◽  
Vol 12 (3) ◽  
pp. 1850268 ◽  
Author(s):  
Mohsen Bahmani-Oskooee ◽  
Scott W. Hegerty ◽  
Jia Xu
Keyword(s):  
Exchange Rate ◽  
Bilateral Trade ◽  
Exchange Rate Volatility ◽  
Trade Flows ◽  
Negative Effects ◽  
Exchange Rate Uncertainty ◽  
Long Run ◽  
Bilateral Trade Flows ◽  
Short Run ◽  
Export Industries

Exchange-rate risk is often thought to reduce international trade flows, but numerous theoretical and empirical analyses have pointed toward positive as well as negative effects. This is particularly true when bilateral trade flows for individual industries are estimated. In this study, we extend the literature to the case of Japanese trade with China for 110 import industries and 95 export industries. Aggregate Japanese exports, but not imports, respond to real exchange rate volatility in the long run, while most individual export and import industries respond in the short run. Although many individual Japanese import industries are affected in the long run by risk, mostly negatively, this is even more the case for exporters. A larger proportion of Japanese export industries are affected by exchange rate uncertainty for most industry sectors. Manufacturing exports are particularly vulnerable to this risk, with a large share responding negatively to increased volatility.

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 Asymmetric Effects of Exchange Rate Changes on the Trade Balance of Singapore

2017 ◽  
Vol 17 (4) ◽  
pp. 20170055
Author(s):  
Mohsen Bahmani-Oskooee ◽  
Hanafiah Harvey
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
Bilateral Trade ◽  
Research Direction ◽  
Asymmetric Effects ◽  
Nonlinear Ardl ◽  
Long Run ◽  
Ardl Approach ◽  
Short Run ◽  
Exchange Rate Changes

Previous studies that tested the short-run and long-run effects of exchange rate changes on trade balances assumed that the effects are symmetric. The more recent research direction has now changed to investigating the possibility of asymmetric effects. In this paper, we assess the short-run and long-run effects of exchange rate changes on the bilateral trade balances of Singapore with her 11 partners. By applying the nonlinear ARDL approach, which separates appreciations from depreciations, we find that exchange rate changes have short-run asymmetric effects in most models. The short-run effects, however, lasted into the long run in a few models. In the long run, while depreciation improves Singapore’s trade balance with the U.S., it hurts it with Malaysia and China. These three partners account for almost 50 % of Singapore’s trade.

Does exchange-rate uncertainty matter in the Malaysia–E.U. bilateral trade? An industry level investigation

Empirica ◽  
2015 ◽  
Vol 43 (3) ◽  
pp. 461-485 ◽  
Author(s):  
Muhammad Aftab ◽  
Rubi Ahmad ◽  
Izlin Ismail ◽  
Mumtaz Ahmed
Keyword(s):  
Exchange Rate ◽  
Bilateral Trade ◽  
Exchange Rate Uncertainty ◽  
Industry Level

ASYMMETRIC EFFECTS OF EXCHANGE RATE VOLATILITY ON BILATERAL TRADE BETWEEN TAIWAN AND INDONESIA

2020 ◽  
Vol 65 (04) ◽  
pp. 857-888
Author(s):  
MEI-SE CHIEN ◽  
NUR SETYOWATI ◽  
CHIH-YANG CHENG
Keyword(s):  
Exchange Rate ◽  
Bilateral Trade ◽  
Exchange Rate Volatility ◽  
Asymmetric Effect ◽  
Ardl Model ◽  
Asymmetric Effects ◽  
Long Run ◽  
Short Run

This paper investigates the effect of exchange rate volatility on bilateral trade between Taiwan and Indonesia via 19 export and import industries. Considering the existence of an asymmetric effect of exchange rate volatility on trade, we employ an asymmetric ARDL model and arrive at the following main results. First, the long-run asymmetric effect of exchange rate volatility shows far higher impacts on Taiwan’s exports to Indonesia than on Taiwan’s imports from Indonesia. Second, the short-run asymmetric effect of exchange rate volatility causes unstable changes on the trade amounts for most of Taiwan’s export and import industries with Indonesia.

Asymmetric effects of exchange rate changes on Turkish bilateral trade balances

2017 ◽  
Vol 41 (2) ◽  
pp. 279-296 ◽  
Author(s):  
Mohsen Bahmani-Oskooee ◽  
Ferda Halicioglu
Keyword(s):  
Exchange Rate ◽  
Bilateral Trade ◽  
Asymmetric Effects ◽  
Exchange Rate Changes
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