Exchange-Rate Volatility and Foreign Trade: Evidence From Thirteen LDC's

Arize, Augustine C.; Osang, Thomas; Slottje, Daniel J.

doi:10.1080/07350015.2000.10524843

Cited by 305 publications

(260 citation statements)

References 32 publications

Supporting

Mentioning

224

Contrasting

Unclassified

Order By: Relevance

“…A theoretical framework seems to indicate a negative relationship between international trade flow and exchange rate volatility. This is because higher exchange rate volatility leads to a higher cost for risk-averse traders and to lesser foreign trade (Arize et al, 2000). Several empirical studies indeed confirm the view that exchange rate volatility reduces international trade flow (see, inter alia, Chowdhury, 1993;Arize, 1995Arize, , 1998and Arize et al, 2000).…”

Section: Introductionsupporting

confidence: 50%

“…This is because higher exchange rate volatility leads to a higher cost for risk-averse traders and to lesser foreign trade (Arize et al, 2000). Several empirical studies indeed confirm the view that exchange rate volatility reduces international trade flow (see, inter alia, Chowdhury, 1993;Arize, 1995Arize, , 1998and Arize et al, 2000). On the other hand, there are a number of papers which suggest that exchange rate volatility imposes a positive effect on international trade (see, Asseery and Peel, 1991;Franke, 1991;Giovannini, 1988;Sercu and Vanhulle, 1992;and Dellas and Zilberfarb, 1993).…”

Section: Introductionmentioning

confidence: 75%

“…This paper employs a model similar to the one used in Arize et al (2000) and Choudhry (2005). The following relationship is tested to check for the effects of the exchange rate 9 The descriptive statistics and the unit root test results that follow are available on request.…”

Section: Main Model Employedmentioning

confidence: 99%

“…According to Arize (1995) and Arize et al (2000), the coefficient of the price ratio (δ 2 ) should be negative. As indicated by Bailey et al (1986Bailey et al ( , 1987 and Arize (1995), the influence of the exchange rate volatility (V t ) on trade is uncertain.…”

Section: Main Model Employedmentioning

confidence: 99%

See 3 more Smart Citations

UK imports, third country effect and the global financial crisis: Evidence from the asymmetric ARDL method

Choudhry

Hassan

Papadimitriou

2014

International Review of Financial Analysis

View full text Add to dashboard Cite

This paper examines the role of exchange rate volatility in determining real imports. As a robustness check, it further explores the impact of the recent global financial crisis which is a period characterized by heightened exchange rate volatility. More specifically, we investigate the impact of exchange rate volatility on UK real imports from Germany, Japan and the US during the period January 1991 -March 2013. In contrast to most studies which focus on bilateral trade, we additionally explore the third country exchange rate volatility effect on UK imports. To capture the nonlinear features which often characterize macroeconomic data, we employ the asymmetric autoregressive distributed lag (ARDL) approach to cointegration. Our results suggest that exchange rate volatility plays an important role and reveal that there is a significant effect of the recent financial crisis on UK imports. This finding is consistent when we test for the third country volatility effect. Finally, we find that there is a significant causal relationship between exchange rate volatility and UK imports both in bilateral tests and in tests which account for the third country exchange rate volatility. JEL Classification: F1, F10Keywords: Real imports, Exchange Rate Volatility, Asymmetric Cointegration, Financial Crisis 1 We thank two anonymous referees for several useful comments and suggestions. We also thank the participants at

show abstract

Section: Introductionsupporting

confidence: 50%

Section: Introductionmentioning

confidence: 75%

Section: Main Model Employedmentioning

confidence: 99%

Section: Main Model Employedmentioning

confidence: 99%

See 2 more Smart Citations

UK imports, third country effect and the global financial crisis: Evidence from the asymmetric ARDL method

Choudhry

Hassan

Papadimitriou

2014

International Review of Financial Analysis

View full text Add to dashboard Cite

show abstract

“…The influence of exchange rate fluctuations is evidenced to have negative impact on foreign trade as its growth has been impeded (Ozturk, 2006) in developed and less developed countries (Arize et al, 2000). It is not unusual if not so many people are interested in the movements in a country's currency if it has a virtually closed economy.…”

Section: Introductionmentioning

confidence: 99%

Problems faced by internatıonal firms in developing countries due to exchange rate fluctuations: a critical study of international firms in Turkey

Atta¹

2017

Pressacademia

View full text Add to dashboard Cite

Purpose-Exchange rate fluctuations and instability have rekindled interest of researchers in the subject of relationship between international trade and exchange rate. This study focused on the impact of exchange rate on international trade churning out various problems faced by international firms in developing countries specifically in Turkey. Methodology-A bi-variate framework was employed in the study for exchange rate and foreign trade. The study used the VAR approach and VAR granger causality in the identification of long run co-integration and causality. Data used was between 1975 and 2014. Findings-It was found that there was no directional granger causality between exchange rate and foreign trade in Turkey. However, diverse dynamic linkages were found between exchange rate and foreign trade in Turkey using Impulse Response Functions. Conclusion-The study concluded that, international firms in Turkey are not singularly motivated by exchange rate increase or decrease to engage in international trade.

show abstract

The impact of multiple volatilities on import demand for U.S. commodities: the case of soybeans

2010

View full text Add to dashboard Cite

The focus of this study is the effects of exchange rate, commodity price, and ocean freight cost risks on import demand with forward-futures markets. The case of U.S. and Brazilian soybeans is analyzed empirically using monthly data. A two-way error component two-stage least squares procedure for panel data is used for the analysis. Risk for these three effects is measured by the moving average of the standard deviation. Major soybean importers are sensitive to exchange rate risk. Importing countries in general are not sensitive to soybean price and ocean shipping cost risks for Brazilian or U.S. soybeans. © 2010 Wiley Periodicals, Inc.

show abstract

Exchange-Rate Volatility and Foreign Trade: Evidence From Thirteen LDC's

Cited by 305 publications

References 32 publications

UK imports, third country effect and the global financial crisis: Evidence from the asymmetric ARDL method

UK imports, third country effect and the global financial crisis: Evidence from the asymmetric ARDL method

Problems faced by internatıonal firms in developing countries due to exchange rate fluctuations: a critical study of international firms in Turkey

The impact of multiple volatilities on import demand for U.S. commodities: the case of soybeans

Contact Info

Product

Resources

About