Effect of exchange rate risk on intra-EC trade

Stokman, Ad

doi:10.1007/bf01388354

Cited by 25 publications

(7 citation statements)

References 14 publications

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“…8 Another important issue is the choice of an appropriate proxy for the unobservable exchange rate risk or uncertainty. Most empirical studies use measures that are based on the standard deviation of the level or change of the exchange rate; recent examples are Bahmani-Oskooee and Ltaifa (1992), Chowdhury (1993), and Stokman (1995). Others, including Hooper and Kohlhagen (1978), derive uncertainty proxies from the spread between spot and forward exchange rates.…”

Section: Measurement Of Exchange Rates and Exchange Rate Volatilitymentioning

confidence: 98%

Exchange Rate Volatility and Exports: Regional Differences between Developing and Industrialized Countries

Sauer

Bohara

2001

Rev International Economics

132

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This study uses a large panel of industrialized and developing countries to investigate the link between exchange rate volatility and exports. Although the empirical literature on this relationship is extensive, a clear consensus about its nature and importance is yet to emerge. Using fixed-and random-effects models to capture cross-country differences, pooled export equations are estimated for the entire panel and various subsets of countries. The results, which are robust across different volatility measures, indicate that negative effects exist for LDC exports, especially from Latin America and Africa, but not for exports from Asian LDCs or industrialized countries.

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Section: Measurement Of Exchange Rates and Exchange Rate Volatilitymentioning

confidence: 98%

Exchange Rate Volatility and Exports: Regional Differences between Developing and Industrialized Countries

Sauer

Bohara

2001

Rev International Economics

132

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“…Even though policy discussions seem to be guided by a belief that pegging the exchange rate promotes international trade, the research literature, both theoretical and empirical, fails to reach a one-sided conclusion in this respect (Broll and Eckwert 1999;McKenzie 1999;Pugh *Corresponding author. Email: haymakg@yahoo.com Pugh, Tyrrall, and Tarnawa 1999;Stokman 1995;Tenreyro 2007;Baum and Caglayan 2010).…”

Section: Introductionmentioning

confidence: 99%

Does exchange rate volatility discourage international trade? A meta-regression analysis

Haile

Pugh

2013

The Journal of International Trade & Economic Development

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Since the breakdown of the Bretton Woods agreement, the trade effect of exchange rate variability (ERV) has been contentious. However, neither the theoretical nor the empirical literature provides unambiguous guidance on the trade effect of ERV. This article applies metaregression analysis to the empirical literature and finds evidence of: modest publication bias; a range of authentic empirical effects that are highly conditional, even with respect to sign and, correspondingly, pronounced heterogeneity in the reported results. Investigation of this heterogeneity reveals that the results are significantly influenced both by authors' modelling strategies and by the contexts of their investigations. In particular, researchers are most likely to find an adverse trade effect by investigating low-frequency real exchange variability and trade between less developed economies, hence, beyond the reach of hedging opportunities (as suggested by previous studies). In general, our most important advice for policy makers is that economic research does not reveal a single representative effect size.

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“…The methodology and results of these studies vary widely. Kim and Lee (1996), Stockman (1995), and Chowdhury (1993) find the relation between volatility and trade to be negative, while finds conflicting results. Bahmani-Oskooee and Sayeed (1993) and Bailey et al (1986) find no relation.…”

Section: Introductionmentioning

confidence: 85%