scholarly journals Exchange Rate Volatility and Trade: An Empirical Investigation from the Egyptian Economy

2018 ◽  
Vol 5 (4) ◽  
pp. 140
Author(s):  
Osama M. Badr ◽  
Ahmed F. El-khadrawi
Keyword(s):  
Exchange Rate ◽  
Empirical Investigation ◽  
Trade Openness ◽  
Exchange Rate Volatility ◽  
Negative Consequences ◽  
Middle Income ◽  
Rate Fluctuation ◽  
Trading Partners ◽  
The Impact ◽  
Cointegration Relationship

The main aim of this paper is to assess empirically the impact of exchange rate volatility (ERV) on the export and import functions in reference to Egypt’s major trading partners over the period of 1980–2016. Estimates of a cointegration relationship are obtained using the ARDL model. The conditional variance of the GARCH (1,1) model is taken as a proxy for exchange rate fluctuation. The observed outcomes reveal a significant negative coefficient of volatility on export and a non-significant positive coefficient on import. Indeed, this finding supports the traditional view that higher volatility will decrease export. To avoid the negative consequences of ERV, policymakers should shift from the concept of specialization based on the comparative advantage to competitive advantage and focus on the diversification of Egyptian exports while avoiding risks associated with market concentration by exploring potential opportunities that would increase trade openness by expanding Egypt’s trade with other countries, especially with low and middle-income and emerging countries.

The Effects of Exchange Rate Volatility on Sri Lankan Exports: An Empirical Investigation

2010 ◽  
Vol 11 (1) ◽  
pp. 51-68
Author(s):  
E. M. Ekanayake ◽  
Dasha Chatrna
Keyword(s):  
Exchange Rate ◽  
Empirical Investigation ◽  
Exchange Rate Volatility ◽  
Type Model ◽  
Sri Lankan ◽  
Trade Data ◽  
Trading Partners ◽  
The Impact ◽  
The Relationship

This paper investigates effects of exchange rate volatility on Sri Lankan exports to its major trading partners. In this paper, we use a generalized ARCH-type model (GARCH) to generate a measure of exchange rate volatility which is then tested in a model of Sri Lankan exports. Testing sectoral trade data allows us to identify whether the effect of exchange rate volatility differs depending on the types of the goods traded. The results obtained in this paper suggest that the impact of exchange rate volatility differs between different categories of goods although it remains difficult to firmly establish the nature of the relationship.

scholarly journals EFEK KETERBUKAAN PERDAGANGAN PADA VOLATILITAS NILAI TUKAR

2019 ◽  
Vol 10 (1) ◽  
pp. 38-45
Author(s):  
Wayrohi Meilvidiri ◽  
Syahruddin Syahruddin ◽  
Romualdus Turu Putra Maro Djanggo
Keyword(s):  
Exchange Rate ◽  
Money Supply ◽  
Trade Openness ◽  
Exchange Rate Volatility ◽  
Normality Test ◽  
Lm Test ◽  
Exchange Rate Movements ◽  
Negative Effect ◽  
The Exchange Rate ◽  
The Impact

This study uses the q to q dataset for the period 2011-2018, to examine the effect of trade openness on the exchange rate, on the other hand variable money supply, inflation and GDP growth and high-low exchange rates (dummy) will smooth the impact of shocks to the exchange rate . Using the OLS econometric estimator to see the effect of variables and the ARCH method to measure the uncertainty of exchange rate movements. Estimation results show that trade openness (open trade index); the money supply (money supply) and the high-low peak value of the exchange rate have a significant positive effect while the growth variable has a significant negative effect on exchange rate volatility. The LM test simultaneously found ARCH in residual data in lag 1 and lag 2. The normality test found abnormal residuals, while the residual heteroscedasticity test showed no ARCH problems in the last residuals.

Financial performance of commercial banks in the emerging markets

2022 ◽  
Vol 5 (2, special issue) ◽  
pp. 244-257
Author(s):  
Wondmagegn Biru Mamo ◽  
Habtamu Legese Feyisa ◽  
Mekonnen Kumlachew Yitayaw
Keyword(s):  
Exchange Rate ◽  
Emerging Markets ◽  
Financial Performance ◽  
Commercial Banks ◽  
Banking Sector ◽  
Trade Openness ◽  
Exchange Rate Volatility ◽  
Internet Access ◽  
Net Interest Margin ◽  
The Impact

In the economic growth of a country, the banking sector plays a significant role (Alam, Rabbani, Tausif, & Abey, 2021). The overall objective of the study is to investigate the financial performance of commercial banks in emerging markets. The study tried to see the impact of governance, exchange rate volatility, trade openness, and internet access on the financial performance of commercial banks in Ethiopia during the years from 2014 to 2019. The study employed a random-effects model using balanced panel data. The result indicated that composite governance index, trade openness, and internet access have a positive and statistically significant effect on the financial performance of commercial banks as measured by their return on assets. However, the exchange rate volatility has a negative and statistically significant effect on the financial performance of commercial banks. On the other hand, the result of bank-specific variables considered in the study such as profit margin, asset utilization, net interest margin, overhead efficiency, and numbers of branches have a positive and statistically significant effect on the financial performance of commercial banks. Contrarily, the equity multiplier ratio has a negative and significant effect on the financial performance of commercial banks

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.

scholarly journals The impacts of the exchange rate volatility on colombian trade with its main trade partners

EconoQuantum ◽  
2021 ◽  
Vol 18 (2) ◽  
pp. 57-81
Author(s):  
Mauricio Vaz Lobo Bittencourt ◽  
◽  
Paula Andrea Mosquera Agudelo
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Volatility ◽  
Economic Policies ◽  
Fixed And Random Effects ◽  
Trading Partners ◽  
Likelihood Model ◽  
The Exchange Rate ◽  
Pseudo Maximum Likelihood ◽  
The Impact ◽  
Trade Partners

Objective: To investigate the main impacts of the bilateral exchange rate (er) volatility on Colombian exports for its main trade partners for the period 2001-2019, with the use of control variables in addition to er volatility measure, such as countries’ gdp, distance, and dummy variables for contiguity and common language. Methodology: Pooled ols, Fixed and Random Effects Panel models, and Poisson Pseudo Maximum Likelihood model. Results: The results showed that er volatility is harmful to the commercial relationship between Colombia and its trading partners. An increase of 1 % in the long term exchange rate volatility can reduce Colombian exports by 0.25-0.4%. Results also suggest that past information is particularly relevant in order to assess the impact of exchange rate volatility on trade. As expected, exporter and importer incomes can increase trade, and distance can reduce trade. Limitations: Sectoral data used can be better explored. Originality: For the first time this methodology and data analysis is used to investigate the impact of er volatility on Colombian trade. Conclusions: Results add another empirical evidence to the literature of exchange rate and trade, where economic policies that aim to stabilize the exchange rate are likely to increase the volume of trade for Colombia and its trade partners.

scholarly journals An Empirical Sector-Specific Gravity Model for Hungarian International Trade

2015 ◽  
Vol 63 (6) ◽  
pp. 2145-2150
Author(s):  
Jana Šimáková ◽  
Daniel Stavárek
Keyword(s):  
International Trade ◽  
Exchange Rate ◽  
Foreign Trade ◽  
Gravity Model ◽  
Exchange Rate Volatility ◽  
Extended Model ◽  
Panel Data Regression ◽  
Trading Partners ◽  
Trade And Exchange ◽  
The Impact

This paper contributes to the economic literature on the impact of exchange rate volatility on Hungary’s foreign trade. Basic gravity model shows that trade volume between a pair of countries is an increasing function of their sizes (GDP) and a decreasing function of the distance between them. Additional factors included in extended model are population, dummy for common border and proxy for exchange rate volatility. The measure of exchange rate volatility is estimated by GARCH model. This paper explores relationship between trade and exchange rate uncertainty using quarterly data over the period 1999:1 – 2014:3. In order to obtain the objective result, we use the panel data regression for 10 sectors of Hungarian international trade based on SITC classification and six major trading partners (Austria, Germany, France, United Kingdom, Italy and Poland). The significant parameters obtained from panel regression demonstrate that bilateral exchange rate volatility leads to a decrease in Hungary’s foreign trade.

scholarly journals FDI Inflows, Price and Exchange Rate Volatility: New Empirical Evidence from Latin America

2016 ◽  
Author(s):  
Silvia Dal Bianco ◽  
Loan Nguyen Cong To
Keyword(s):  
Human Capital ◽  
Exchange Rate ◽  
Latin American ◽  
Fixed Effects ◽  
Trade Openness ◽  
Exchange Rate Volatility ◽  
Price Volatility ◽  
Fdi Inflows ◽  
Negative Effect ◽  
The Impact

This paper investigates the impact of price and real exchange rate volatility on Foreign Direct Investment (FDI) inflows in a panel of 10 Latin American and Caribbean countries, observed between 1990 and 2012. Both price and exchange rate volatility series are estimated through the Generalized Autoregressive Conditional Heteroscedasticity model (GARCH). Our results, obtained employing the Fixed Effects estimator, confirm the theory of hysteresis and option value, in so far it is found a statistically significant negative effect of exchange rate volatility on FDI. Price volatility, instead, turns out to be positive but insignificant. Moreover, we show that human capital and trade openness are key for attracting foreign capital. From the policy perspective, our analysis suggests the importance of stabilization policies as well as the one of government credibility in promoting trade openness and human capital formation.

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