Competition, asset build up and export incentives: The role of imperfect credit market

Marjit, Sugata; Ray, Moushakhi

doi:10.1016/j.asieco.2021.101400

Cited by 3 publications

(2 citation statements)

References 22 publications

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“…Domestic firms that lose competitiveness as a result of an increase in the real exchange rate may lobby for trade restrictions. In practice, disagreements among trading partners over exchange rate policies may lead to an increase in domestic political pressures and unilateral trade action (Marjit and Ray 2021) In a broader sense, countries may use trade policy to compensate for exchange rate overvaluation in order to address persistent trade imbalances.…”

Section: Literature Surveymentioning

confidence: 99%

Does the Exchange Rate and Its Volatility Matter for International Trade in Ethiopia?

Nguse

Oshora

Fekete-Farkas

et al. 2021

JRFM

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This study was carried out to investigate the impact of the Ethiopian exchange rate and its volatility on international trade. Trade openness was used as a proxy for international trade in the study. The study’s general objective was to investigate how international trade responds to exchange rate levels and volatility. The study relied solely on secondary time-series data spanning the years 1992 to 2019. The Autoregressive Distributive Lag (ARDL) model was used in the study to investigate the long-term relationship between exchange rate level, volatility, and international trade performance. An error correction model was used to estimate the variables in the short term. To conduct the regression analysis, Foreign Direct Investment (FDI), Gross Domestic Product (GDP), and inflation were used as control variables. The finding of the study implies that: in the short term, the exchange rate level was found to negatively and significantly influence international trade. However, exchange rate volatility positively and significantly affects international trade both in the short and in the long term. In addition, gross domestic product, foreign direct investment, and inflation have a positive effect on international trade both in the short term and long term. This finding lends support to the J-curve effects, which suggest an initial loss in the short term followed by a dramatic gain in the long term. However, the findings of this study suggest that there is no significant gain from international trade to justify currency depreciation in Ethiopia.

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Section: Literature Surveymentioning

confidence: 99%

Does the Exchange Rate and Its Volatility Matter for International Trade in Ethiopia?

Nguse

Oshora

Fekete-Farkas

et al. 2021

JRFM

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“…Let the return earned against each unit of foreign bonds held be * i in foreign currency. 10 If e ~is the exchange rate expected by the wealth-holders at any point of time, then the expected rate of return on a unit of foreign bonds is 8 Of late, production of traded goods by taking loans or credit from banks has been studied by Beladi et al (2018), Marjit and Mishra (2020) and Marjit and Ray (2021), which motivates our analysis, although we have a different point of concern altogether. 9 The demand for cash may be for various reasons including precautionary and speculative purposes.…”

Section: The Modelmentioning

confidence: 98%

Money, exchange rate and export quality

Ganguly

Acharyya

2022

The Journal of International Trade & Economic Development

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This paper theoretically examines the effect of an expansionary monetary policy on export quality and its ramifications on the aggregate employment of the unskilled workers in a competitive general equilibrium framework of a small open economy. This issue assumes relevance since monetary policies are often pursued by the central bank of an economy to manage exchange rate fluctuations under a managed float regime, which may have adverse consequences for export-quality choices and thereby for export growth given the growing preference of buyers in richer nations for higher qualities of goods they consume. Under optimal allocation of wealth over a portfolio of cash, domestic assets and foreign assets, we show that an increase in the domestic money supply affects the choice of export-quality primarily in two ways. One is through larger investment, capital formation and consequent endowment effect; the other is through changes in the nominal exchange rate. Under less price-elastic demand for a non-traded good, the export quality is upgraded when higher quality varieties of the export good are relatively capital intensive. On the other hand, though the expansionary monetary policy may raise the aggregate employment of unskilled workers due to its endowment effect, may lower it through changes in the quality of the export good. The overall effect is thus ambiguous. A larger initial size of bequests has a similar effect.

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Export Performance Under Imperfect Competition: Evidence from Manufacturing Firms in Cameroon

Fambeu

2024

J Ind Compet Trade

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Competition, asset build up and export incentives: The role of imperfect credit market

Cited by 3 publications

References 22 publications

Does the Exchange Rate and Its Volatility Matter for International Trade in Ethiopia?

Does the Exchange Rate and Its Volatility Matter for International Trade in Ethiopia?

Money, exchange rate and export quality

Export Performance Under Imperfect Competition: Evidence from Manufacturing Firms in Cameroon

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