scholarly journals Third Country Effect on Exchange Rate: A Theoretical Explanation

2021 ◽  
Vol 9 (1) ◽  
pp. 89
Author(s):  
N. Keembiyahetti
Keyword(s):  
Exchange Rate ◽  
Theoretical Explanation ◽  
Country Effect

Exchange rate risk and international trade: The role of third country effect

2018 ◽  
Vol 167 ◽  
pp. 152-155 ◽  
Author(s):  
Cengiz Tunc ◽  
M. Nihat Solakoglu ◽  
Senol Babuscu ◽  
Adalet Hazar
Keyword(s):  
International Trade ◽  
Exchange Rate ◽  
Exchange Rate Risk ◽  
Rate Risk ◽  
Country Effect

Antidumping Investigations and the Pass-Through of Antidumping Duties and Exchange Rates: Reply

2010 ◽  
Vol 100 (3) ◽  
pp. 1283-1284 ◽  
Author(s):  
Bruce A Blonigen ◽  
Stephen E Haynes
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Empirical Evidence ◽  
Structural Breaks ◽  
Theoretical Explanation ◽  
Antidumping Duties ◽  
Pass Through ◽  
Exchange Rate Pass Through ◽  
The U.S

This reply responds to a comment that correctly identifies an invalid assumption in our original article that antidumping (AD) duties are subtracted from the U.S. price when calculating AD duties in administrative reviews. While this point invalidates our theoretical explanation and empirical evidence on the magnitude of AD duty pass-through, it does not affect our original article's theory or empirical evidence on the magnitude of exchange rate pass-through, or the presence of structural breaks in both the AD duty and exchange-rate pass-through coefficients stemming from AD investigations and orders.

scholarly journals Beggar-Thy-Neighbor Effects of Exchange Rates: A Study of the Renminbi

2017 ◽  
Vol 9 (4) ◽  
pp. 344-366 ◽  
Author(s):  
Aaditya Mattoo ◽  
Prachi Mishra ◽  
Arvind Subramanian
Keyword(s):  
Developing Countries ◽  
Exchange Rate ◽  
Exchange Rates ◽  
Real Exchange Rate ◽  
Trade Data ◽  
Neighbor Effects ◽  
Exchange Rate Changes ◽  
Robust Evidence ◽  
Country Effect ◽  
Identification Strategy

This paper estimates the effect of China's exchange rate changes on exports of developing countries in third markets. The degree of competition between China and its developing country competitors in specific products and destinations plays a key role in the identification strategy. The strategy exploits variation across exporters, importers, products and time—afforded both by disaggregated trade data and bilateral exchange rates—to estimate this “competitor country effect.” There is robust evidence of a statistically and quantitatively significant effect. A 10 percent appreciation of China's real exchange rate boosts a developing country's exports at the product level on average by about 1.5–2.5 percent. (JEL F14, F31, F33, O19, O24, P33)

Examining the Asymmetric Effects of Third-Country Exchange Rate Volatility on Pakistan–China Commodity Trade

2021 ◽  
pp. 2150008
Author(s):  
Ahmed Usman ◽  
Nicholas Apergis ◽  
Sofia Anwar
Keyword(s):  
Exchange Rate ◽  
Nonlinear Models ◽  
Exchange Rate Volatility ◽  
Annual Data ◽  
Commodity Trade ◽  
Asymmetric Effects ◽  
The Third ◽  
Asymmetric Impact ◽  
The Empirical Analysis ◽  
Country Effect

Keeping in view the idea of the third-country effect by Cushman, the analysis attempts to capture the asymmetric impact of third-country exchange rate volatility on Pakistan–China commodity trade. The empirical analysis is based on the annual data for 14 industries that export from Pakistan to China and 34 industries that import to Pakistan from China. The findings of the study confirm that nonlinear models generate more significant results both in the short and long runs. Moreover, the empirical findings suggest that the asymmetric assumption alone is not enough, and instead, we should use it along with the third economy effect.

scholarly journals Why RMB should be more flexible

2017 ◽  
Vol 9 (02) ◽  
pp. 156-173 ◽  
Author(s):  
Yoke Yue Kan
Keyword(s):  
Exchange Rate ◽  
Early Stage ◽  
Exchange Rate Regime ◽  
Correlation Study ◽  
Flexible Exchange Rate ◽  
Theoretical Explanation ◽  
Exchange Rate Policy ◽  
Chinese Economy ◽  
Content Type ◽  
Rmb Internationalization

Purpose This report examines the recent developments and trends relating to the Chinese government’s policy actions and the key issues that determine the choice of exchange rate regime in China. An up-to-date “stock-take” of the economic indicators is conducted to determine what is suitable for China in light of the rapidly evolving nature of the world economy and trading environment. This paper discusses the role of economic development, trade competitiveness, capital flow, foreign exchange reserve, and RMB internationalization in the determination of the RMB exchange rate regime. Design/methodology/approach This research uses an inductive approach to gain a fine-grained understanding of the complex, multifaceted aspects of China’s exchange rate policy. A combination of statistical analysis, including basic descriptive statistics, trend analysis, and a correlation study are used to explore the association between various indicators and their implications. The report also draws on analysis of a broad range of data sources and the work of numerous researchers and research institutions. Findings A more flexible exchange rate regime can play a complementary role towards rebalancing the Chinese economy by raising the buying capacity of families, rebalancing growth towards domestic consumption, and reducing reliance on export. China’s price elasticity of the demand for exports was relatively low that the appreciation of the Chinese currency has almost no influence on optimizing China’s trade balance. A more flexible two-way flow in RMB would be suitable under the current cash flow scenario in China. Reduced intervention will facilitate further adjustment in reserves. Lastly, in the early stage of RMB internationalization, flexibility in the exchange rate is one of the factors that influences its growth prospect as a reserve currency. Research limitations/implications The findings and conclusion are derived based on the latest empirical information, statistical evidence, and economic theory. This inquiry does not build on a theory, and aims to neither verify a theory, nor test hypotheses. Rather, it aims to demonstrate, assess, and explain significant roles that various economic factors play in shaping the future exchange rate regime of China. Originality/value This paper presents the rationale behind a more flexible two-way exchange rate, by assessing the latest empirical data and theoretical explanation that support such a move.

scholarly journals Pengaruh Perubahan Nilai Tukar Rupiah Terhadap Neraca Transaksi Berjalan Indonesia, Periode 1990.I – 2004.II (Kasus Indonesia - Amerika Serikat)

2007 ◽  
Vol 8 (3) ◽  
pp. 1-21 ◽  
Author(s):  
Arintoko Arintoko ◽  
Faried Wijaya
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Current Account ◽  
Theoretical Explanation ◽  
Rate Change ◽  
Exchange Rate Change ◽  
Empirical Results ◽  
Real Gdp ◽  
J Curve ◽  
Curve Theory

This research investigates the effects of exchange rate change on the relative current account and real GDP in Indonesia to US. This research provides time series evidence for the period of first quarter of 1990 to second quarter of 2004 under flexibel exchange rate regimes. The analysis is based on a J-Curve theory. First, this research employs unit root, cointegration and Granger causality tests and summarizes the relationships between real exchange rate, the current account, and real GDP. Second, the standard theoretical explanation of the JCurve effect is used to motivate a vector autoregression(VAR) and error correction mechanism(ECM) analysis of real exchange rate change on the relative current account, and real GDP for Indonesia to US. This research finds weak evidence of a J-Curve for the Indonesia current account, in fact these empirical results reject the J-Curve hypothesis. The empirical study finds little evidence that a currency depreciation causes a current account deficits in the short run in Indonesia-US bilateral data and no evidence of a reliable long run effect of exchange rate change on the current account. Interestingly, empirical results show that these evidence are not consistent with the standard theoretical explanation of the J-Curve. Consequently, these empirical results pose a strong challenge for international economic theory and policy.Keywords: exchange rate change, current account, real GDP, and J-Curve theory

Exchange‐rate volatility and US–Hong Kong industry trade: is there evidence of a ‘third country’ effect?

2013 ◽  
Vol 45 (18) ◽  
pp. 2629-2651 ◽  
Author(s):  
Mohsen Bahmani‐Oskooee ◽  
Scott W. Hegerty ◽  
Jia Xu
Keyword(s):  
Hong Kong ◽  
Exchange Rate ◽  
Exchange Rate Volatility ◽  
Industry Trade ◽  
Country Effect

Exchange rate volatility and ASEAN-4’s trade flows: is there a third country effect?

2015 ◽  
Vol 14 (1) ◽  
pp. 91-117 ◽  
Author(s):  
Abdorreza Soleymani ◽  
Soo Y. Chua ◽  
Abdul Fatah Che Hamat
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Volatility ◽  
Trade Flows ◽  
Country Effect
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