Is there J‐curve effect in the US Service Trade? Evidence from asymmetric analysis

Bahmani‐Oskooee, Mohsen; Karamelikli, Hüseyin

doi:10.1002/ijfe.2624

Cited by 7 publications

(13 citation statements)

References 34 publications

(58 reference statements)

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“…We apply the Wald tests ( W S R and W L R ) in short-run and long-run asymmetry for real exchange rate by testing and (Bahmani-Oskooee et al. 2019 ; Bahmani-Oskooee and Karamelikli 2022 ; Ongan et al. 2023 ).…”

Section: Empirical Model and Methodologymentioning

confidence: 99%

“…If the coefficient of the real exchange rate ( POS and/or NEG ) is positive or insignificant in the short run but negative and significant in the long run, this will imply the asymmetric inverse J Curve (Bahmani-Oskooee et al. 2022 ; Bahmani-Oskooee and Nouira 2021 ; Bahmani-Oskooee and Karamelikli 2022 ).…”

Section: Empirical Model and Methodologymentioning

confidence: 99%

“…The second group of empirical studies on the J‑curve used disaggregated trade volumes. Baek ( 2007 , the ARDL model for forest industries, no evidence), Bahmani-Oskooee and Bolhasani ( 2008 , the linear ARDL models to 152 industries, no evidence), Bahmani-Oskooee and Fariditavana ( 2020 , the linear and nonlinear ARDL models for different industries, evidence for some), Bahmani-Oskooee and Karamelikli ( 2022 , the linear and nonlinear ARDL models for finance industry, evidence), Ongan et al. ( 2023 , the linear and nonlinear ARDL models for 91 industries, evidence for some).…”

Section: Introductionmentioning

confidence: 99%

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The US State-Level Geographic J-curve Hypothesis Mapping with Canada

Ongan,

Gocer,

Karamelikli

2023

Rev Reg Res

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This study creates a US state-level asymmetric J‑curve hypothesis testing map with Canada. The map may visually present how a US state policymaker manages bilateral trade balances with Canada. Green-colored US states support the evidence of the asymmetric J‑curve hypothesis, while red-colored and gray-colored states do not. The main empirical finding indicates that the asymmetric J‑curve hypothesis is supported for only 15 US states and D.C., shown in green on the map. This suggests that policymakers of these US states may have more sustainable and manageable bilateral trade policies with Canada. If so, policymakers in red/grey US states should reevaluate their bilateral trade policy regulations, especially those related to taxation, budgetary frameworks, energy prices, and other relevant factors that can impact consumer-producer prices and thereby create competitive state-level real exchange rates. By doing so, they may achieve the anticipated positive outcomes of the J‑curve effect to export more.

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Section: Empirical Model and Methodologymentioning

confidence: 99%

Section: Empirical Model and Methodologymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The US State-Level Geographic J-curve Hypothesis Mapping with Canada

Ongan,

Gocer,

Karamelikli

2023

Rev Reg Res

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“…Brynjolfsson et al [24] claim (in terms of regression models) that, as a function of intangible investments, the Productivity and Output of General Purpose Technologies (e.g., Artificial Intelligence) show the Productivity-J-Curve. Bao and Le [25] studying the exchange rate between Vietnam and the EU and by Bahmani-Oskooee and Karamelikli [26] in the service trade in the US recently established the existence of a J-Curve in trade relations between countries. The effect of the COVID-19 pandemic on the exchange rate between China and the US, as well as the EU, has also been shown to exhibit a J-Curve [27].…”

Section: Theoretical Aspects and Mathematicalmentioning

confidence: 99%

Modelling J-Curve by Using Differential Equations: Studies in Finances and Entrepreneurship

Atre¹,

Volarević²

2022

ujam

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In this paper, a mathematical formalism for defining the J-Curve phenomenon is set up in the form of a corresponding differential equation with practical application. An explicit form of the differential equation to describe the J-Curve, as well as the solution of the differential equations in terms of polynomials with coefficients satisfying a particular property was presented for the first time. The J-Curve and S-Curve are modelled as Riccati's nonlinear differential equation of the 1 st order. A mathematical form of the differential equation is proposed that corresponds in structure to the Laguerre Polynomials (linear differential equation of the 2 nd order), resulting in J-Curve as a solution. To confirm this, it is necessary to fulfil two main criteria for the mathematical validation of the J-Curve -confirmation of the structure of Laguerre polynomials (a polynomial equation with coefficients of alternating sign) and an R-squared score greater than 0.6. Two case studies are presented to validate the theoretical concepts and demonstrate the application of J-Curve mathematical modelling -Returns on Venture Investments (where returns from start-up investments are analysed over a 12-year period) and Returns on Long-Term Stock Investments (based on actual financial data for the period from 2016 to 2020 for the NIFTY 500 Index of the National Stock Exchange of India). A direct connection between the mathematical formulation and the graphs obtained is shown, which corresponds to the mathematical validation of the J-Curve phenomenon. It is mathematically shown how the financial data manifest the J-Curve behaviour, satisfying the initial assumptions of such a model. The mathematical model set up in this way can be verified in practice on different other types of data, which could create interest in an interdisciplinary approach in such research. This could include studies particularly from other economic fields such as micro-or macroeconomics.

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“…Bahmani-Oskooee and Fariditavana ( 2020 ) used the linear and nonlinear ARDL models and found evidence supporting this hypothesis for different non-food products coded 099 (food preparations, n.e.s.). Bahmani-Oskooee and Karamelikli ( 2022 ) used the linear and nonlinear ARDL models and found evidence supporting asymmetric inverse J-curve for the finance industry with Canada. Both groups of studies found mixed results regarding the validity of the J-curve (Bahmani-Oskooee and Ratha 2004 ).…”

Section: Introductionmentioning

confidence: 99%

Food-based bilateral trade balance performances between the United States and Canada under COVID-19

Ongan,

Karamelikli,

Gocer

2023

J Consum Prot Food Saf

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The food industry has been greatly impacted by COVID-19, causing governments to restrict food exports to prevent shortages. A negative food trade balance reveals a country's dependence on imports and underscores the significance of a sound food policy. Hence, for the first time, this study examines the J-curve hypothesis for the U.S. with Canada at the state rather than country level and creates maps based on the findings. The approach of this study differs from all empirical studies using country-level J-curve analyses, because the U.S. may require a state level analysis since its states differ in terms of economic-population sizes, tax rates, and administrative structures. For this aim, this study employs the linear and nonlinear autoregressive distributed lag (ARDL) approaches. The results indicate that while only 8 out of 47 U.S. states support the food-based asymmetric J-curve hypothesis, 15 U.S. states support the asymmetric inverse J-curve hypothesis. Additionally, 9 U.S. states support the food-based symmetric J-curve hypothesis, and 2 U.S. states support the symmetric inverse J-curve hypothesis. Based on these results, policymakers of U.S. states where the J-curve hypothesis is not supported should review their food-based bilateral trade policies with Canada. Graphical abstract These maps depict the U.S. states in green and red, indicating support for the J-curve and inverse J-curve hypotheses, respectively. The map on the left was generated using the linear model (symmetric approach), while the map on the right was generated using the nonlinear model (asymmetric approach). Supplementary Information The online version contains supplementary material available at 10.1007/s00003-023-01436-x.

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Is there J‐curve effect in the US Service Trade? Evidence from asymmetric analysis

Cited by 7 publications

References 34 publications

The US State-Level Geographic J-curve Hypothesis Mapping with Canada

The US State-Level Geographic J-curve Hypothesis Mapping with Canada

Modelling J-Curve by Using Differential Equations: Studies in Finances and Entrepreneurship

Food-based bilateral trade balance performances between the United States and Canada under COVID-19

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