Exchange Rate Volatility and Exports: New Empirical Evidence from the Emerging East Asian Economies

The effects of fluctuations in the yen/dollar exchange rate on the business cycle of the smaller East Asian economies are examined in this paper. The cointegration error-correction model is employed to examine the nature of the interrelationship between the yen/dollar exchange rate and the economic stability of the East Asian countries. The empirical results reveal strong and lasting effects of changes in the yen/dollar exchange rate on the economic income and exchange rate stability of the East Asian countries. The results also indicate that stabilizing the yen/dollar exchange rate with the East Asian business cycle would benefit Japan as well as the economies of East Asia.

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Surmounting the Individual: Establishing a Common Currency in Asia – A Case Study of East Asian Economies

Global Economy Journal ◽

10.1515/gej-2012-0018 ◽

2013 ◽

Vol 13 (1) ◽

pp. 63-88

Author(s):

Maryam Ishaq ◽

Muhammad Atiq Ur Rehman

Keyword(s):

Exchange Rate ◽

Financial Crisis ◽

East Asian ◽

Currency Union ◽

Structural Var ◽

Forecast Errors ◽

Common Currency ◽

North East ◽

Asian Economies ◽

East Asian Economies

In the Ministerial meeting of ASEAN held in 1998, the devastation caused by Asian financial crisis remained the point of contemplation. The participants enthusiastically discussed the need to establish common currency and exchange rate system in order to counter any financial crisis anticipated. The ever-growing financial crisis threatening every region in the world has compelled the economists to acknowledge the elevating need of financial cooperation in their respective territories. This is certainly meant to ensure economic stability at both economic and political level. The authors, in the course of this paper, have focused the need to materialize the ideal of promoting monetary integration in the major economies of South, South East, and North East Asia. Calculating Optimum Currency Area (OCA) Index, the authors in a way present costs and benefits associated with the adoption of this currency union. Demand and supply sides of each economy are tested as a pre requisite of OCA in order to provide a good rationale in favor of selection of regions. For this purpose, Structural VAR Analysis (SVAR) method was employed and innovation accounting is done through variance decomposition of forecast errors, impulse response function and correlation matrix. The theory of OCA has been tested by (i) calculating the OCA index estimated by simple OLS method and (ii) following Bayoumi and Eichengreen extrapolating the variability of exchange rate data. The common consensus drawn from the two approaches adopted implies that there is a good potential in the region excluding China to construct a currency union particularly amongst South and North East Asian economies. It is worth mentioning, however, that some of these will have to work harder to join and become an effective member of this currency merger.

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Are Family Firms More Levered? An Analysis of Family and Non-Family Firms

SAGE Open ◽

10.1177/21582440211022322 ◽

2021 ◽

Vol 11 (2) ◽

pp. 215824402110223

Author(s):

Jahanzaib Haider ◽

Abdul Qayyum ◽

Zalina Zainudin

Keyword(s):

Family Firms ◽

East Asian ◽

Ordinary Least Squares ◽

Maturity Structure ◽

The Family ◽

Asian Economies ◽

The Board Of Directors ◽

East Asian Economies ◽

Combined Data

This study analyzes the leverage policies of the family and non-family firms of eight East Asian Economies (Hong Kong, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, and Taiwan) by using combined data of 690 family and non-family firms with 3,224 firm–years over the period 2006–2010. This study has used an ordinary least squares (OLS) regression for analyzing the data for the first question, while for the second question, logit regression has been used as the dependent variable (a binary variable). Prior research on family and non-family firms has revealed that family firms issue less (high) debt than non-family firms. Our analysis on a sample of East Asian Economies discloses that family firms have significantly different leverage levels than non-family firms, but their signs are not consistent. On the contrary, when the owner works as CEO/Chairman or member of the Board of Directors, then the family firms issue less debt than the non-family firms. Besides that, this study adds a new question that has not been addressed in the prior studies. The new question has focused on the speed of leverage adjustment. It is found that family firms and non-family firms regarding their debt maturity structure (short-term debt and long-term debt), the speed of leverage adjustments, and their decision to issue securities (i.e., debt vs. equity) are not significantly different. This study concluded that though family firms have a strong influence on each economy, but in South-East Asian countries, leverage policies of the family firms are not much different than that of non-family firms.

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