Asymmetrical relationship between oil price shocks and trade deficit: Evidence from Pakistan

Ahad, Muhammad; Anwer, Zaheer

doi:10.1080/09638199.2019.1655782

Cited by 26 publications

(27 citation statements)

References 30 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The impact of oil price shocks on the stock exchange is also investigated (Najaf & Najaf, 2016;Waheed et al, 2018). Recently, the connection between oil price shocks and trade deficits is investigated and found a positive relationship between increase in oil price and trade deficit (Ahad & Anwer, 2020). Additionally, the electricity prices are extremely in need of oil prices and suffering from a severe crisis in the last two periods.…”

Section: Resultsmentioning

confidence: 99%

Do the electricity price shocks influence the Sectoral Production and KSE100 Index in Pakistan? An ARDL structural breaks approach

Khan

2021

JAEBS

View full text Add to dashboard Cite

This research investigates the long-term cointegration of electricity price with sectoral production and equity market in Pakistan. Fourteen major industrial sectors and the KSE100 index is taken into consideration to determine the relationship. Literature in this regard is available but this research is distinct from previous literature for it tests the sectoral production and equity market relationship with electricity price change in Pakistan. Monthly data from 1st Jan 2011 till 31st Dec 2019 is taken for fourteen sectors from the sources of Quantum Index Pakistan Bureau of Statistics (PBS) and for KSE100 index from (www.investing.com). An Auto Regressive Distributed Lag (ARDL) model and bound test for multiple structural breaks has been applied. It is found that almost the production of all industrial sectors and KSE100 index stock prices are adversely affected by the electricity price shocks both in long-term and short-term. The study suggests that management should implement a moderate monitory policy that is neither more expansionary nor contractionary. The government should provide incentives to those who successfully control energy wastage. A mixed kind of energy policy is recommended with higher weightage to the development of renewable energies to reduce foreign exchange outflow with imported furnace oil. This study is limited to the sectoral production and equity market of Pakistan. A cross-sectional research is encouraged to compare the connection between major energy costs and macroeconomic variables in different countries.

show abstract

Section: Resultsmentioning

confidence: 99%

Do the electricity price shocks influence the Sectoral Production and KSE100 Index in Pakistan? An ARDL structural breaks approach

Khan

2021

JAEBS

View full text Add to dashboard Cite

show abstract

“…Pakistan is already giving importance to its natural nonconventional sources i.e, wind energy, solar energy, geothermal, tidal energy, bioenergy, micro/small-hydel, and other emerging technologies like fuel cell that can be integrated commercially to curtail the energy deficiency and eventually the energy crisis. By promoting green energy sources, Pakistan has a great opportunity to attract foreign investments to not only reduce its current account deficit but also improves the energy sector of the country [64] [65] [66].…”

Section: Potential Of Sustainable Energy Resourcesmentioning

confidence: 99%

Holistic and Scientific Perspectives of Energy Sector in Pakistan: Progression, Challenges and Opportunities

et al. 2020

View full text Add to dashboard Cite

“…Bahmani-Oskooee (2019) employed the linear and nonlinear ARDL approach to examine the J-curve phenomenon between Korea and its 14 trading partner economies and prove the existence of short-run and long-run asymmetric impacts of exchange rate changes on the bilateral trade balance in most cases. Some other studies examine the impact of oil price fluctuations, real effective exchange rate and real domestic and foreign incomes on the balance of trade in different economies and found the heterogeneous and asymmetric responses of the concerned economies to the fluctuations in oil price and changes in other variables (Baek and Kwon, 2019;Ahad and Anwer, 2020;Baek and Choi, 2020;Faheem et al, 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

An Econometric Analysis of Exigent Determinants of Trade Balance in Finland: An Autoregressive Distributed Lag (ARDL) Approach

Ditta¹,

Asim

Rehman

2020

RAMSS

View full text Add to dashboard Cite

A number of research papers analyzed the factors that may have impacts on the balance of trade for the effective macroeconomic policies but the results of these studies have created ambiguity which implies that further research is needed as the worsening trade balance can limit the economic growth of any country. Hence the current paper is an effort to study the short-run and long-run relationships among trade balance, real effective exchange rate, GDP per capita, urbanization, unemployment and inflation rate for the Finnish economy. Autoregressive Distributed Lag (ARDL) bound testing methodology to co-integration along with error correction mechanism is applied by using time series data from 1990 to 2019 for checking the existence of long-run equilibrium between explained variable and its various determinants. Empirical findings of ARDL show that the long-run relationship among the factors of the estimated model holds. The results indicate that real effective exchange rate, urbanization and inflation are having a significant but negative impact on Finland’s trade balance for both the short-run and long-run while the impacts of GDP per capita and unemployment are significant and positive on the Finish balance of trade. In addition to above, the structural stability of mean and variance of the error term for the estimated ARDL model is verified with the help of CUSUM and CUSUM square graphs. Therefore, a reliable policy measure to improve the balance of trade by encouraging the domestic production and curtailing the imports is suggested in Finland.

show abstract

Asymmetrical relationship between oil price shocks and trade deficit: Evidence from Pakistan

Cited by 26 publications

References 30 publications

Do the electricity price shocks influence the Sectoral Production and KSE100 Index in Pakistan? An ARDL structural breaks approach

Do the electricity price shocks influence the Sectoral Production and KSE100 Index in Pakistan? An ARDL structural breaks approach

Holistic and Scientific Perspectives of Energy Sector in Pakistan: Progression, Challenges and Opportunities

An Econometric Analysis of Exigent Determinants of Trade Balance in Finland: An Autoregressive Distributed Lag (ARDL) Approach

Contact Info

Product

Resources

About