scholarly journals Purchasing Power Parity and Efficiency of Black Market Exchange Rate in African Countries

2011 ◽  
Vol 47 (5) ◽  
pp. 52-70 ◽  
Author(s):  
Ahmad Zubaidi Baharumshah ◽  
Siti Hamizah Mohd ◽  
Siew-Voon Soon
Keyword(s):  
Exchange Rate ◽  
Purchasing Power Parity ◽  
Black Market ◽  
Purchasing Power ◽  
Market Exchange ◽  
Power Parity ◽  
African Countries ◽  
Market Exchange Rate

scholarly journals Productivity Bias Hypothesis: New Evidence from Parallel Market Exchange Rate

ECONOMICS ◽  
2020 ◽  
Vol 8 (1) ◽  
pp. 31-40
Author(s):  
James Temitope Dada ◽  
Philip Akanni Olomola ◽  
Folorunsho Monsur Ajide
Keyword(s):  
Exchange Rate ◽  
Purchasing Power Parity ◽  
Foreign Exchange Market ◽  
Unit Root Test ◽  
Black Market ◽  
Market Exchange ◽  
Power Parity ◽  
Productivity Data ◽  
Official Exchange Rate ◽  
Market Exchange Rate

AbstractAim/Purpose: The purpose of this study is to investigate Productivity Bias Hypothesis (PBH) in Nigeria using parallel (black) market exchange rate.Design/Methodology/Approach: The study focused on Naira-Dollar (N/$) parallel market exchange rate. Quarterly data from 1995 to 2018 were used. Data on domestic productivity and parallel market exchange rate were sourced from Central Bank of Nigeria (CBN) statistical bulletin, 2018 edition. US productivity data was sourced from Federal Reserve Economic Data. Autoregressive Distributed Lag (ARDL) was used as the estimation technique.Findings: The result reveals that parallel (black) market exchange rate support the presence of productivity bias hypothesis in Nigeria. Furthermore, the purchasing power parity hypothesis was rejected using the conventional unit root test. This implies that using official exchange rate, the study rejects the productivity bias hypothesis.Research Implications/Limitations: The implication of the study is that exchange rate in Nigeria should be determined freely in the foreign exchange market.Originality/Value/Contribution: Previous studies have used official exchange rate to test the validity of the productivity bias hypothesis, and the results can be basically described as mixed. Hence, this study differs from extant studies as it examined productivity bias hypothesis using parallel market exchange rate.

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