Exchange Rate Effects on Agricultural Exports: Transaction‐Level Evidence from Pakistan

Abstract

This article examines the effects of domestic currency depreciation on agricultural exports from Pakistan including the responses of price and quantity margins. It uses highly disaggregated firm‐level data that contains the exchange rates of the actual currencies of invoicing at the transaction level. The study finds that the currency depreciation positively affects both intensive and extensive margins. The intensive margin increase in agricultural exports operates mainly through prices, whereas the response of quantities is relatively smaller. Moreover, depreciation improves the extensive margins of firms and products and expands the client base in existing markets. These responses vary widely across firms' exporting experience, trade orientation, sectoral and spatial distribution, exchange rate regimes, and invoicing currencies.

Agricultural Exports and Performance of Agricultural Firms in India: An Empirical Analysis using System GMM

“…Tang, Lai, & Ozturk (2011) observed that exports and GDP of Asia's four economies are cointegrated, implying that there is a long-run relationship between the variables. Ali (2017) found that exchange rate fluctuation favorably impacted both intensive and extensive margins (IM and EM) in the case of Pakistan between 2000 and 2013. Buguk, Isik, Dellal, & Allen (2003), using an error correction model, highlighted that the exchange rate and its volatility had little effect on Turkish exports.…”

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The nexus of agricultural exports and performance in Malaysia: a dynamic panel data approach

“…There is a large volume of published studies describing the role of the agricultural sector and economic growth. The economic development also affects the agricultural industry (Devaux et al, 2018;Bauer and Johnston 2013;Akanbi et al, 2013;Kohler and Ferjani, 2018;Ali, 2017). Abubakar et al (2018) investigated agricultural export performance on the economic growth of Nigeria for the period 1980 to 2016.…”

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