Does trade freedom affect exchange rate movement? a perspective of high-technology trade
Changes in the degree of trade freedom influence economic development and foreign investment, which in turn, affect currency values and exchange rate movements. Therefore, this study examined the direct and indirect impacts of trade freedom on exchange rate movement in emerging, developing, and deve...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Routledge
2024
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| Online Access: | http://psasir.upm.edu.my/id/eprint/106122/ http://psasir.upm.edu.my/id/eprint/106122/1/106122.pdf |
| _version_ | 1848867711543672832 |
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| author | Cong, Shufeng Chin, Lee Kumarusamy, Risidaxshinni |
| author_facet | Cong, Shufeng Chin, Lee Kumarusamy, Risidaxshinni |
| author_sort | Cong, Shufeng |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | Changes in the degree of trade freedom influence economic development and foreign investment, which in turn, affect currency values and exchange rate movements. Therefore, this study examined the direct and indirect impacts of trade freedom on exchange rate movement in emerging, developing, and developed economies. Empirical tests conducted using panel data from 75 countries revealed that trade freedom has a nonlinear U-shaped relationship with exchange rate movement, which is positively moderated by high-technology trade and foreign direct investment. Additionally, the results of heterogeneity analysis showed that trade freedom has a linear positive impact on the exchange rate movement of developed economies but a U-shaped impact on emerging and developing economies, with a stronger impact on emerging economies. The findings of this study provide valuable insights for governments to strike a balance between promoting trade freedom and maintaining currency exchange rate stability. |
| first_indexed | 2025-11-15T13:52:53Z |
| format | Article |
| id | upm-106122 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T14:40:50Z |
| publishDate | 2024 |
| publisher | Routledge |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-1061222025-08-25T02:24:43Z http://psasir.upm.edu.my/id/eprint/106122/ Does trade freedom affect exchange rate movement? a perspective of high-technology trade Cong, Shufeng Chin, Lee Kumarusamy, Risidaxshinni Changes in the degree of trade freedom influence economic development and foreign investment, which in turn, affect currency values and exchange rate movements. Therefore, this study examined the direct and indirect impacts of trade freedom on exchange rate movement in emerging, developing, and developed economies. Empirical tests conducted using panel data from 75 countries revealed that trade freedom has a nonlinear U-shaped relationship with exchange rate movement, which is positively moderated by high-technology trade and foreign direct investment. Additionally, the results of heterogeneity analysis showed that trade freedom has a linear positive impact on the exchange rate movement of developed economies but a U-shaped impact on emerging and developing economies, with a stronger impact on emerging economies. The findings of this study provide valuable insights for governments to strike a balance between promoting trade freedom and maintaining currency exchange rate stability. Routledge 2024 Article PeerReviewed text en cc_by_nc_nd_4 http://psasir.upm.edu.my/id/eprint/106122/1/106122.pdf Cong, Shufeng and Chin, Lee and Kumarusamy, Risidaxshinni (2024) Does trade freedom affect exchange rate movement? a perspective of high-technology trade. Journal of International Trade and Economic Development, 34 (3). pp. 552-572. ISSN 0963-8199; eISSN: 1469-9559 https://www.tandfonline.com/doi/full/10.1080/09638199.2024.2320164 10.1080/09638199.2024.2320164 |
| spellingShingle | Cong, Shufeng Chin, Lee Kumarusamy, Risidaxshinni Does trade freedom affect exchange rate movement? a perspective of high-technology trade |
| title | Does trade freedom affect exchange rate movement? a perspective of high-technology trade |
| title_full | Does trade freedom affect exchange rate movement? a perspective of high-technology trade |
| title_fullStr | Does trade freedom affect exchange rate movement? a perspective of high-technology trade |
| title_full_unstemmed | Does trade freedom affect exchange rate movement? a perspective of high-technology trade |
| title_short | Does trade freedom affect exchange rate movement? a perspective of high-technology trade |
| title_sort | does trade freedom affect exchange rate movement? a perspective of high-technology trade |
| url | http://psasir.upm.edu.my/id/eprint/106122/ http://psasir.upm.edu.my/id/eprint/106122/ http://psasir.upm.edu.my/id/eprint/106122/ http://psasir.upm.edu.my/id/eprint/106122/1/106122.pdf |