Estimation of the J-curve effect in the bilateral trade of Hungary

Šimáková, Jana

doi:10.7327/cerei.2013.09.07

Cited by 6 publications

(7 citation statements)

References 10 publications

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“…The J-curve effect in bilateral trade between Czechia and Germany was also empirically confi rmed by Šimáková [23], who applied a traditional methodology comprised of Johansen's cointegration and error correction model. Moreover, Šimáková [36] also found the J-curve in Czechia's trade with Poland.…”

Section: Financementioning

confidence: 87%

The effect of the exchange rate on industry-level trade flows in Czechia

Šimáková¹,

Stavárek²

2015

E+M

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Section: Financementioning

confidence: 87%

The effect of the exchange rate on industry-level trade flows in Czechia

Šimáková¹,

Stavárek²

2015

E+M

Self Cite

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“…While the existing literature about J-curve effect in the trade between European Union (EU) countries and their partners is plentiful (e.g., Hacker and Hatemi-J, 2003 ; 2004 ; Bahmani-Oskooee et al., 2006 ; Hsing, 2009 ; Hsing and Sergi, 2009 ; Šimáková and Stavárek, 2013 ; 2014 ; Nusair, 2017 ; Michail, 2018 ; Gürtler, 2018 ; Lucarelli et al., 2018 ), few studies are dedicated for Vietnam. Phan and Jeong (2015) analyzed Vietnam's trade balance with 16 partners by using Fully Modified OLS and Dynamic OLS estimators for the panel data ranging from 1999Q1 to 2012Q4 and reported that exchange rate negatively influenced trade balance and thus no J-curve effect.…”

Section: Literature Reviewmentioning

confidence: 99%

Asymmetric impact of exchange rate on trade between Vietnam and each of EU-27 countries and the UK: evidence from nonlinear ARDL and the role of vehicle currency

Bao

2021

Heliyon

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The relationship between exchange rate and trade balance has been spotlighted in the past several decades and thus examined by manifold research. The findings, however, lack of consensus despite the intensive efforts in investigating the role of exchange rate as an important determinant of trade balance in various countries. Although the existing papers are abundant, most of them neglect the role of vehicle currency. Besides, few articles are dedicated to Vietnam, and none has inspected the exchange rate-trade balance nexus between Vietnam and the EU. This study is the first to scrutinize how bilateral exchange rates, together with vehicle currency exchange rate, asymmetrically impact Vietnam's bilateral trade balance with respect to EU-27 countries and the UK. The NARDL estimation results strongly acknowledge the importance of USD as vehicle currency when more significant short-run and long-run coefficients are found. Accordingly, this article can provide some useful implications for policy-makers, especially when Vietnam was first labelled currency manipulator by the USA in December 2020. Particularly, USD/VND movement can affect not only Vietnam-USA but also Vietnam-EU and Vietnam-UK trade balance. In addition, VND appreciation against USD seems beneficial to Vietnam's bilateral trade with the EU plus the UK.

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“…So as to investigate the role of USD as a vehicle currency, we use the model employed by Šimáková (2013) as well as Bao and Le (2021b):…”

Section: Methodsmentioning

confidence: 99%

The Roles of Vehicle Currency and Real Effective Exchange Rates in the Trade of Every ASEAN Member With the EU-28

Bao

2022

SAGE Open

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A common limitation of the studies on the exchange rate-trade balance linkage is ignoring the USD’s role as a vehicle currency. Some recent papers have recognized this gap and proposed a hypothesis that the neglection of the USD’s role as a vehicle currency can restrict the significance of findings. This study aims to test that hypothesis in the trade between each of the 10 countries in ASEAN (Association of Southeast Asian Nations) with the whole EU-28. Specifically, this paper is the first to examine how the vehicle currency USD’s exchange rates, along with the real effect exchange rates, asymmetrically impact the trade balance of each ASEAN country with the EU-28 by employing the NARDL method to investigate whether the ignorance of the USD leads to fewer significant coefficients of exchange rates. The results indicate that the vehicle currency model (VCER) outperforms the real effective exchange rate (REER) model, which supports the hypothesis. In addition, the results are robust when controlling for the role of exchange rate volatility.

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Estimation of the J-curve effect in the bilateral trade of Hungary

Cited by 6 publications

References 10 publications

The effect of the exchange rate on industry-level trade flows in Czechia

The effect of the exchange rate on industry-level trade flows in Czechia

Asymmetric impact of exchange rate on trade between Vietnam and each of EU-27 countries and the UK: evidence from nonlinear ARDL and the role of vehicle currency

The Roles of Vehicle Currency and Real Effective Exchange Rates in the Trade of Every ASEAN Member With the EU-28

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