Does J-curve phenomenon exist in case of Laos? An ARDL approach

Kyophilavong, Phouphet; Shahbaz, Muhammad; Uddin, Gazi Salah

doi:10.1016/j.econmod.2013.08.014

Cited by 35 publications

(31 citation statements)

References 52 publications

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“…It also allows for the variables to have different optimal lags, which is not applicable to other techniques. Lastly, the technique employs a single reduced form equation for determining both long-and shortrun relationship among variables (Babajide & Lawal, 2016;Babajide et al, 2015;Bahmani-Oskooee & Ng, 2002;Kyophilavong et al, 2013;Odhiambo, 2010;Pesaran & Shin, 1999).…”

Section: The Ardl Estimation Techniquementioning

confidence: 99%

Economic growth, financial development and trade openness in Nigeria: An application of the ARDL bound testing approach

Lawal

Nwanji

Asaleye

et al. 2016

Cogent Economics & Finance

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For over a decade now, various efforts have been put in place by various governments of the developing economies to promote economic growth, financial development and expand trade with mixed results. The ability of financial development and/or trade openness to influence economic growth in the developing economies has been a subject of hot debate and remains inconclusive. While a number of scholars are of the view that compelling cointegration exists among each of these constructs, another set of substantial authors have documented that economic growth, trade openness and financial development do evolve independent of each other. Drawing from four financial developments-growth nexus theories, this study used the ARDL bound estimation techniques to examine the existence of cointegration among economic growth, financial development and trade openness in Nigeria. We intend to know what policy instruments need to be manipulated so as to achieve economic growth and financial stability. Our results show that a two-way cointegration exists between economic growth and financial development, on the one hand, as well as between economic growth and trade openness, on the other hand. We therefore recommend that in order to achieve economic growth, policymakers should pursue strong financial development and increase trade openness.

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Section: The Ardl Estimation Techniquementioning

confidence: 99%

Economic growth, financial development and trade openness in Nigeria: An application of the ARDL bound testing approach

Lawal

Nwanji

Asaleye

et al. 2016

Cogent Economics & Finance

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show abstract

“…(Garcia-Herrero & Koivu, 2009;Yaya & Lu, 2012;Xu, 2008), The additional studies which follow the trade balanced elasticity theory research patterns suggest that there is a positive relationship between them in the short-run and a negative relationship in the long-run. Saeed and Hussain (2013), Lencho (2013), Bhattarai and Armah (2013), Kyophilavong et al (2013) and Matlasedi et al (2015) discover that in case of Pakistan both J-curve and Marshall-Lerner condition effect hold, Ethiopia, Ghana, Laos, South African respectively. However, Jiang (2014) conclude that on the TB, exchange rate change has a positive impact on the long-run case.…”

Section: Literature Reviewmentioning

confidence: 99%

The Relationship between RMB Exchange Rate and Chinese Trade Balance: Evidence from a Bootstrap Rolling Window Approach

Masih¹,

Li²,

Pervaiz³

2018

IJEF

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This study inspects the fundamental relationship between the exchange rate and the trade balance in China. The outcome shows that the real effective exchange rate and trade balance in China has no causal relationship. Though, seeing structural changes in two series, we got the result those both long-run and short-run associations using full-sample data are wobbly, which proposes that the full-sample causation tests can"t be relied upon. Then, using time-varying rolling window method to reexamine the dynamic fundamental relationship. The results show that real effective exchange rate has both negative and positive impacts on the trade balance in several sub-periods, and in turn, trade balance has same impact on real effective exchange rate for China. These findings provide no support for the existence of J-curve effect and Marshall-Lerner Condition in case of China. This study shows that it is impossible to resolve China"s trade deficit, depending only on the movement of RMB"s exchange rate.

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“…Narayan, 2006;Kyophilavong et al, 2013) recommend using impulse-response function especially while searching for J-curve evidence. Following Pesaran and Shin's (1998) method, we employed the generalized impulse response analysis using the VAR.…”

Section: Wwwccsenetorg/ijefmentioning

confidence: 99%

“…To ensure the convergence of the dynamics to long-run equilibrium, the sign of the coefficient (Ω) for the lagged error correction term (ECM t-1 ) is required to be negative and significant (Kyophilavong et al, 2013).…”

Section: Empirical Approach and Analysis Processmentioning

confidence: 99%

Currency Depreciation, Trade Balance and Intra-Industry Trade Interactions in Turkey’s OECD Trade

Demiral¹

2016

IJEF

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This study re-examines the determinants of Turkey's trade balance in its manufactures trade with 33 OECD-member countries for the short-run and the long-run. Unlike other studies, in the relationships we also control the moderating effects of the availability of import substitutes proxied by intra-industry trade. We analyze quarterly aggregated time-series data of the period spanning from 1998.QI to 2015.QIII, following the autoregressive distributed lag (ARDL) bounds testing approach to the cointegration and the error correction modeling. Estimation results reveal that real effective exchange rate, together with domestic and foreign incomes are still among the core determinants of Turkey's trade balance in the manufacturing sectors. There is no significant impact of domestic final oil prices that also include all the taxes on gasoline. The trade balance depends on domestic income negatively and the aggregated income of the OECD countries positively. The finding that real depreciation of Turkish lira against to those of Turkey's OECD trade partners improves trade balance in both the short-run and the long-run, indicates no evidence of J-curve adjustment process. Unsurprisingly, the intra-industry trade seems to be an important factor that moderates the elasticities of trade balance to its determinants, especially to real effective exchange rate and domestic income. Overall results underline the importance of import-substitution capability besides the export-oriented production to ease the longstanding large trade deficits for Turkey.

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Does J-curve phenomenon exist in case of Laos? An ARDL approach

Cited by 35 publications

References 52 publications

Economic growth, financial development and trade openness in Nigeria: An application of the ARDL bound testing approach

Economic growth, financial development and trade openness in Nigeria: An application of the ARDL bound testing approach

The Relationship between RMB Exchange Rate and Chinese Trade Balance: Evidence from a Bootstrap Rolling Window Approach

Currency Depreciation, Trade Balance and Intra-Industry Trade Interactions in Turkey’s OECD Trade

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