Impact of exchange rate volatility on trade: empirical evidence for the East Asian economies
We investigated the impact of real exchange rate (REX) volatility on the trade performance of six East Asian economies. Several break dates were detected in the REX series over the sample period of January 1990 to December 2008. Exchange rate volatility was determined to be inherently asymmetric in...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
University of Malaya
2015
|
| Online Access: | http://psasir.upm.edu.my/id/eprint/45054/ http://psasir.upm.edu.my/id/eprint/45054/1/RATE.pdf |
| _version_ | 1848850475615518720 |
|---|---|
| author | Chee, Wooi Hooy Baharumshah, Ahmad Zubaidi |
| author_facet | Chee, Wooi Hooy Baharumshah, Ahmad Zubaidi |
| author_sort | Chee, Wooi Hooy |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | We investigated the impact of real exchange rate (REX) volatility on the trade performance of six East Asian economies. Several break dates were detected in the REX series over the sample period of January 1990 to December 2008. Exchange rate volatility was determined to be inherently asymmetric in all of the currency markets. We found short-run exports to be adversely affected by REX volatility in four countries, although this response was small. For imports, REX volatility was found to have a negative effect in only two of the six countries (Singapore and Indonesia). In short, there was less evidence to support the hypothesis that currency volatility has a strong negative effect on trade flows in East Asian economies. We also addressed the possibility of endogeneity in regressors and allowed for heterogeneity across countries in the model parameters. |
| first_indexed | 2025-11-15T10:06:53Z |
| format | Article |
| id | upm-45054 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T10:06:53Z |
| publishDate | 2015 |
| publisher | University of Malaya |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-450542021-04-22T07:19:05Z http://psasir.upm.edu.my/id/eprint/45054/ Impact of exchange rate volatility on trade: empirical evidence for the East Asian economies Chee, Wooi Hooy Baharumshah, Ahmad Zubaidi We investigated the impact of real exchange rate (REX) volatility on the trade performance of six East Asian economies. Several break dates were detected in the REX series over the sample period of January 1990 to December 2008. Exchange rate volatility was determined to be inherently asymmetric in all of the currency markets. We found short-run exports to be adversely affected by REX volatility in four countries, although this response was small. For imports, REX volatility was found to have a negative effect in only two of the six countries (Singapore and Indonesia). In short, there was less evidence to support the hypothesis that currency volatility has a strong negative effect on trade flows in East Asian economies. We also addressed the possibility of endogeneity in regressors and allowed for heterogeneity across countries in the model parameters. University of Malaya 2015-06 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/45054/1/RATE.pdf Chee, Wooi Hooy and Baharumshah, Ahmad Zubaidi (2015) Impact of exchange rate volatility on trade: empirical evidence for the East Asian economies. Malaysian Journal of Economic Studies, 52 (1). pp. 75-95. ISSN 1511-4554 https://mjes.um.edu.my/article/view/2813 |
| spellingShingle | Chee, Wooi Hooy Baharumshah, Ahmad Zubaidi Impact of exchange rate volatility on trade: empirical evidence for the East Asian economies |
| title | Impact of exchange rate volatility on trade: empirical evidence for the East Asian economies |
| title_full | Impact of exchange rate volatility on trade: empirical evidence for the East Asian economies |
| title_fullStr | Impact of exchange rate volatility on trade: empirical evidence for the East Asian economies |
| title_full_unstemmed | Impact of exchange rate volatility on trade: empirical evidence for the East Asian economies |
| title_short | Impact of exchange rate volatility on trade: empirical evidence for the East Asian economies |
| title_sort | impact of exchange rate volatility on trade: empirical evidence for the east asian economies |
| url | http://psasir.upm.edu.my/id/eprint/45054/ http://psasir.upm.edu.my/id/eprint/45054/ http://psasir.upm.edu.my/id/eprint/45054/1/RATE.pdf |