scholarly journals THE IMPACT OF TRADE OPENNESS ON MANUFACTURING SECTOR PERFORMANCE

2021 ◽  
Vol 3 (Number 1) ◽  
pp. 12-22
Author(s):  
Sun Fu Neoh ◽  
Tian So Lai
Keyword(s):  
Exchange Rate ◽  
Manufacturing Sector ◽  
Trade Openness ◽  
Dynamic Effect ◽  
Percentage Change ◽  
Series Data ◽  
Lending Rate ◽  
Production Growth ◽  
Sector Performance ◽  
The Impact

Trade openness plays a vital role in boosting the production of the manufacturing sector. Two opposing perspectives identify trade-growth nexus. One posits that trade openness will stifle industrial productivity while the opposing view believes that manufacturing productivity can be enhanced by a trade liberalization regime. This study investigates the instantaneous and jointly dynamic effect of trade openness along with macroeconomic variables (i.e., Malaysian exchange rate and average lending rate) and the event of economic crises on manufacturing sector performance in Malaysia using data from 1981 to 2016. This study employed a distributed lag model. The Augmented Dickey-Fuller (ADF) unit root test was adopted to determine the stationarity of time series data. The empirical results revealed that the effect of both instantaneous and the jointly dynamic effect of the percentage change in trade openness on manufacturing production growth in Malaysia are positive and significant. However, the effects of the percentage change in exchange rate and percentage change in average lending rate are insignificant. Economic crisis has a significant negative impact on Malaysian manufacturing production growth. Therefore, the results strongly recommend that the direction of trade policy in Malaysia should be formulated based on outward-looking strategies.

scholarly journals External Sector and The Nigerian Manufacturing Sector Performance, 1981-2019

2022 ◽  
Vol 05 (01) ◽  
Author(s):  
Leera Kpagih ◽  
Keyword(s):  
Exchange Rate ◽  
Manufacturing Sector ◽  
Trade Openness ◽  
Environment Impact ◽  
Ardl Model ◽  
Long Run ◽  
Short Run ◽  
Sector Performance ◽  
External Sector ◽  
Exchange Rate Level

No country is an island. The globalization phenomenon is making all countries to be interdependent. The external sector environment has become critical for the success of every country and internal balance. Thus, it has become important to examine how much the externa sector environment impact on the performance of the domestic economy. The present study, therefore, examined the influence of Nigerian external sector environment on the performance of the Nigerian manufacturing sector between 1981 and 2019. The study adopted exp-post research design approach and the Autoregressive Distributed Lag (ARDL) model estimation techniques. The empirical model consists of the Nigerian manufacturing sector output index as the dependent variable and exchange rate, trade openness, and foreign direct investment as independent variables and external sector environment variables. Test of unit root results indicated that the variables have mix order of integration, while the co integration analysis results indicated that the variables in the model have stable long run relationship. Estimate of the ARDL model reveals that in the short run exchange rate variations have negative, but significant effect on manufacturing sector performance, while trade openness, and FDI have positive but insignificant influence on the manufacturing sector performance in the short run. In the long run, exchange rate level and FDI inflows have positive and significant effect on the manufacturing sector performance, while trade openness has negative and significant effect on the Nigerian manufacturing sector performance. The study therefore conclude that the Nigerian external sector Environment has significant influence on the performance of the Nigerian manufacturing sector.

Another Side of the Coin: Exchange Rate Movements and the Manufacturing Sector in Nigeria

2018 ◽  
Vol 10 (1-2) ◽  
pp. 63-79
Author(s):  
Anthony Orji ◽  
Jonathan E. Ogbuabor ◽  
Chiamaka Okeke ◽  
Onyinye I. Anthony-Orji
Keyword(s):  
Exchange Rate ◽  
Private Sector ◽  
Time Series Data ◽  
Capital Expenditure ◽  
Manufacturing Sector ◽  
Jel Classification ◽  
Least Square ◽  
Series Data ◽  
Long Run ◽  
The Impact

This study estimated the impact of exchange rate (EXCH) movements on the manufacturing sector in Nigeria over the period 1981–2016. Time series data and ordinary least square (OLS) estimation technique were employed in this study to address the specified objective. The variables analysed were EXCH, manufacturing GDP (MGDP), government capital expenditure, foreign direct investment (FDI), credit to private sector and value of imports. From the result, it is apparent that EXCH movements play a significant role in the manufacturing sector’s performance in Nigeria. Specifically, the findings showed that EXCH, government capital expenditure (GCEXP), imports and FDI were positively related to MGDP, while credit to private sector was negatively related. Among others, the study recommends that the apex bank keep a closer watch on EXCH developments in order to keep formulating up-to-date policies that will ultimately enhance EXCH stability. This will largely contribute to the development of the manufacturing sector in the short and long run. JEL Classification: D51, F31, Q24

scholarly journals The Impact of Macroeconomic Factors on Manufacturing Sector Value Added in Ethiopia: An Application of Bounds Testing Approach to Cointegration

2020 ◽  
Vol 23 (1) ◽  
Author(s):  
Dagim Tadesse Bekele ◽  
Meskerem Teka Haile
Keyword(s):  
Exchange Rate ◽  
Time Series Data ◽  
Manufacturing Sector ◽  
Government Expenditure ◽  
Value Added ◽  
Series Data ◽  
Macroeconomic Variables ◽  
Long Run ◽  
The Impact ◽  
Bound Test

The role of the manufacturing sector for the economic growth and structural change is very low in Ethiopia and performing less compering with that of the other sectors in the economy. So, this research tried to look at how different macroeconomic variables affect the manufacturing sector value added by using annual time series data from 1982 to 2018 estimated by Autoregressive-Distributed Lag (ARDL). The result from the Bound test shows manufacturing sector value added has a long-run relationship with macroeconomic variables in the model. In the long-run, general inflation rate, exchange rate, and trade openness have a significant negative effect on the manufacturing sector value-added. In contrast, general government expenditure has a significant positive effect. Also, the Error Correction model shows an adjustment towards the long-run equilibrium of the manufacturing sector value-added. So, the government has to control the general inflation level, promote demand for domestic manufacturing products and competitiveness of domestic firms, and strengthen the backward link of the sector to decrease its import-input dependency to reduce the effect of exchange rate depressions. Lastly, effective and efficient government expenditure will have to be used to increase the manufacturing sector value-added.

scholarly journals Exchange Rate Variability and Manufacturing Sector Performance in Ghana: Evidence from Cointegration Analysis

2016 ◽  
Vol 2 (1) ◽  
pp. 1 ◽  
Author(s):  
Abdallah Abdul-Mumuni
Keyword(s):  
Exchange Rate ◽  
Time Series Data ◽  
Manufacturing Sector ◽  
Cointegration Analysis ◽  
Series Data ◽  
Telecommunication System ◽  
Exchange Rate Variability ◽  
Distributed Lag ◽  
Sector Performance ◽  
The Government

<p>This study examined the effect of exchange rate variability on manufacturing sector performance in Ghana. Using time series data from the period 1986-2013 and employing the autoregressive distributed lag (ARDL) approach, the empirical results show that there exists both a short as well as long run relationship between exchange rate and manufacturing sector performance. Thus, in Ghana as the exchange rate appreciates, the manufacturing sector performance improves and as it depreciates, the sector is adversely affected.  In view of this, it is recommended that policy should be put in place to regulate the importation of goods that could be locally produced so as to improve the performance of the manufacturing sector. In addition, the government should ensure that there is regular electricity supply, good roads, water and a reliable telecommunication system so that the manufacturing sector can perform effectively and efficiently in order to achieve a considerable rate of economic growth.</p>

scholarly journals Determinants and Sustainability of Manufacturing Sector Performance in Nigeria: The Roles of Selected Macroeconomic Variables

2021 ◽  
Vol 7 (2) ◽  
pp. 31
Author(s):  
Falade Abidemi Olufemi Olusegun
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Real Exchange Rate ◽  
Money Supply ◽  
Manufacturing Sector ◽  
Trade Openness ◽  
Exchange Rate Policy ◽  
Market Force ◽  
Tax Rate ◽  
Sector Performance

Manufacturing sector is a vibrant sector that spurs growth in every other sector of the economy. Despite this, macroeconomic environment in the country has not made this desire materialized. Therefore, the study examined the determinants and sustainability of manufacturing sector performance in Nigeria from 1994-2019. The data used include manufacturing sector output, interest rate, real exchange rate, tax rate, money supply and trade openness. Also, Error Correction Model (ECM) and Pairwise Granger Causality(PGC) techniques were used for the formulated objective. The unit root test confirmed stationarity of interest rate at level; while other were integrated of order one (D = 1). The Johansen co-integration established a long-run relationships. The ECM corrected the disequilibrium at an annual rate of 77.5%. Also, real exchange rate, tax rate and trade openness had a direct and significant effect on manufacturing sector output. While, interest rate and money supply were non-significance. The PGC result revealed a bi-directional causality between real exchange rate and manufacturing sector and tax rate and manufacturing sector output. It was concluded that increase in consumption tax, real exchange rate and liberation of the economy were the determinants of manufacturing sector performance, while appreciation of nigeria’s currency (naira) and increase in tax rate with proportional improvement in infrastructural facilities are needed to sustain it. Therefore, recommended that the financial institutions especially the apex bank should eliminate different bench-mark of exchange rate policy by allowing the market force of demand and supply to depict the real value of naira.

scholarly journals Real Exchange Rate and Manufacturing Performance in Nigeria

2021 ◽  
Vol 10 (2) ◽  
pp. 279
Author(s):  
Abiola John Asaleye ◽  
Rotdelmwa Filibus Maimako ◽  
Henry Inegbedion ◽  
Adedoyin Isola Lawal ◽  
Adeyemi A. Ogundipe
Keyword(s):  
Exchange Rate ◽  
Manufacturing Sector ◽  
Forecast Error ◽  
Impulse Response Function ◽  
Long Run ◽  
Manufacturing Performance ◽  
Short Run ◽  
Sector Performance ◽  
The Exchange Rate ◽  
The Impact

The efficacy of currency devaluation to improve output in Nigeria is under debate, and coupled with an unsatisfactory result in the behaviour of the manufacturing sector performance regenerated interest of this study to investigate the impact of exchange rate on output and employment in the sector. The work uses Structural Vector Autoregression, ECM and Canonical Co-integrating Regression to examine the shock effect, short and long-run elasticities of exchange rate on the manufacturing performance. While employment and output are used as a proxy for manufacturing sector performance. The findings show that changes in the exchange rate are fairly elastic with output and employment both in short and long-run. However, changes in the exchange rate are insignificant with employment in the short run. The variance decomposition form the SVAR shows that forecast error shock of the exchange rate is more prolong on employment than output. Consequently, the result of the estimation of the Impulse Response Function from the Monte Carlos shows that one standard deviation of the exchange shock adversely affect employment. The outcome of the result indicates that the Nigerian exchange rate has not improved output and employment in the manufacturing sector. Several factors may be accounted for this, although, it may be due to cost-push inflationary pressure and unfavourable competitiveness. The study suggests the need to encourage long-term supply-side policies among others to improve the situation.   Received: 7 June 2020 / Accepted: 9 January 2021 / Published: 5 March 2021

scholarly journals The Impact of Rand/Pula Exchange Rate Volatility on Botswana’s Economic Growth

2020 ◽  
Vol 3 (2) ◽  
pp. p27
Author(s):  
SEBEGO, J. ◽  
TSHEKO, B. O. ◽  
MOTLALENG, G. R.
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Time Series Data ◽  
Labour Force ◽  
Trade Openness ◽  
Exchange Rate Volatility ◽  
Series Data ◽  
Method Of Moment ◽  
Generalized Method Of Moment ◽  
The Impact

This paper undertakes an investigation of the impact of the Rand/Pula exchange rate volatility on Botswana’s economic growth. The paper is using annual time series data, from 1977 to 2018. The Generalized Method of Moment (GMM) is employed to evaluate the impact of the real exchange rate volatility on Botswana’s economic growth. The GARCH model results found the Pula/Rand exchange rate to be volatile. The Rand/Pula exchange rate volatility does not have an impact on Botswana’s economic growth. This finding mirrors those of Kaur et al. (2019) and Musyoki et al. (2012). They found negative but insignificant impact of exchange rate volatility on economic growth in Malaysia and Kenya, respectively. Our empirical findings suggest that Botswana’s economic growth is largely explained by trade openness and growth of labour force and not influenced by the Rand/Pula exchange rate volatility.

Impact of exchange rate and oil price on the yield of sovereign bond and sukuk: Evidence from Malaysian capital market

2017 ◽  
Vol 5 (4) ◽  
pp. 27
Author(s):  
Huda Arshad ◽  
Ruhaini Muda ◽  
Ismah Osman
Keyword(s):  
Exchange Rate ◽  
Capital Market ◽  
Time Series Data ◽  
Oil Prices ◽  
Oil Price ◽  
Series Data ◽  
Sovereign Bond ◽  
Long Run ◽  
Short Run ◽  
The Impact

This study analyses the impact of exchange rate and oil prices on the yield of sovereign bond and sukuk for Malaysian capital market. This study aims to ascertain the effect of weakening Malaysian Ringgit and declining of crude oil price on the fixed income investors in the emerging capital market. This study utilises daily time series data of Malaysian exchange rate, oil price and the yield of Malaysian sovereign bond and sukuk from year 2006 until 2015. The findings show that the weakening of exchange rate and oil prices contribute different impacts in the short and long run. In the short run, the exchange rate and oil prices does not have a direct relation with the yield of sovereign bond and sukuk. However, in the long run, the result reveals that there is a significant relationship between exchange rate and oil prices on the yield of sovereign bond and sukuk. It is evident that only a unidirectional causality relation is present between exchange rate and oil price towards selected yield of Malaysian sovereign bond and sukuk. This study provides numerical and empirical insights on issues relating to capital market that supports public authorities and private institutions on their decision and policymaking process.

scholarly journals The Impact of Macroeconomic Variables on Sectoral Indices in Indonesia

ETIKONOMI ◽  
2017 ◽  
Vol 16 (1) ◽  
pp. 71-80 ◽  
Author(s):  
Bambang Sutrisno
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Inflation Rate ◽  
Emerging Market ◽  
Estimation Method ◽  
Least Square ◽  
Series Data ◽  
Macroeconomic Variables ◽  
The Interest Rate ◽  
The Impact

This study aims to examine the effect of macroeconomic variables on sectoral indices in the Indonesian Stock Exchange. The difference in sensitiveness among sectors is an interesting issue to investigate this relationship in an emerging market, such as Indonesia. This study employs ordinary least square (OLS) as an estimation method with monthly time-series data from January 2005 to December 2014. The results document that the interest rate, inflation rate, and exchange rate simultaneously have a significant effect on sectoral indices in Indonesia. The interest rate partially shows a significant negative influence on all sectors except basic industry and chemical, finance, infrastructure, utilities, and transportation, and miscellaneous industry sectors. The inflation rate partially has no significant effect on all sectors. The exchange rate partially has a significant negative impact on all industries.DOI: 10.15408/etk.v16i1.4323

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