Macroeconomic Variables and Current Account Balance in an Open Economy: Evidence from Namibia

Eita, Joel Hinaunye; Manuel, Victoria; Naimhwaka, Erwin

doi:10.1080/10800379.2019.12097348

Cited by 8 publications

(14 citation statements)

References 8 publications

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“…This variable is statistically significant in four out of the six regressions though with a negative sign in one of the regressions. Similar results were obtained by [1]. Contradictory results were obtained by [36] where they discovered a negative and statistically significant relation between population growth rate and current account balances.…”

Section: Population Acting As the Marketsupporting

confidence: 76%

“…Looking at the results of foreign direct investment (FDI) in Table 3 it has a negative and statistically significant relationship with current account balance in African economies during the period of study. A recent study conducted by [1], obtained similar results using three econometric methodologies. [49] found that FDI has a negative and significant relation with current account balance.…”

Section: Foreign Direct Investment (Fdi)supporting

confidence: 55%

“…This interaction variable appears in the regressions labelled (1), ( 4) and ( 6) in Table 3 above. It is represented as LL*Lndva and it contributes negatively to the current account balance in all the regressions and statistically significant at 5% in the regression labelled (1). This means that in landlocked African countries, the effect of forward participation in GVC on current account balances is reduced.…”

Section: Being Landlocked (Ll)mentioning

confidence: 88%

“…(3) and (6). This variable present a coefficient which is positively significant at 10% only in the regression labelled (1). The target of this paper however is GVCP associated to being landlocked economy and not current account balance in landlocked economies.…”

Section: Being Landlocked (Ll)mentioning

confidence: 88%

“…International competitiveness is an important target of many economies in the world. African countries with their specificities have been seeking for alternative ways of improving their competitiveness [1]. As a measure of competitiveness, the current account balance of African countries has witnessed some remarkable fluctuations as revealed by the WDI database of the World Bank.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

The Effects of Global Value Chain Participation on Current Account Balances in African Economies: Does it Matter Being a Landlocked Country?: An Empirical Review

Ningaye

Tchounga

Francis

2021

JEMT

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The general objective of this paper is to evaluate the effects of Global Value Chain Participation (GVCP) on Current Account Balance (CAB) in African countries. The specific objectives are to (1) identify the type of GVCP that contributes more significantly and positively to African countries’ current account balance and (2) find out whether being landlocked affects a country’s participation in global value chain in Africa. This paper uses panel data from three secondary sources: (1) UNCTAD-EORA database (2018) for forward and backward participation indicators, (2) WDI (2018) for current account balance, FDI, population and trade openness and (3) PWT 9.1 for exchange rates. In a linear panel specification, this research applies the Feasible Generalized Least Square (FGLS) econometric techniques and results highlight firstly that forward GVCP contributes more significantly and positively to CAB in Africa with a coefficient ranging between 1.64 and 2.43 in various regressions. Secondly, the effect of GVCP on CAB is reduced in landlocked African countries as revealed in its negative and significant coefficient of -2.33 as the variables are interacted. This paper recommends that, African countries should embark on forward participation and improve connectivity infrastructure to facilitate the participation of landlocked African economies in global interactions.

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Section: Population Acting As the Marketsupporting

confidence: 76%

Section: Foreign Direct Investment (Fdi)supporting

confidence: 55%

Section: Being Landlocked (Ll)mentioning

confidence: 88%

Section: Being Landlocked (Ll)mentioning

confidence: 88%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

The Effects of Global Value Chain Participation on Current Account Balances in African Economies: Does it Matter Being a Landlocked Country?: An Empirical Review

Ningaye

Tchounga

Francis

2021

JEMT

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The Impact of Monetary Policy and Macroeconomic Indicators on the Current Account in Developing ASEAN

Andini,

Zahara,

Suci

2024

KSS

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The current account balance is a component of the balance of payments, in which a surplus or deficit is a form of a country’s external balance or imbalance. Since the 2008 financial crisis and the COVID-19 pandemic, several countries, especially developing countries, have experienced external imbalances, which is related to a continuous pattern of transactions with the rest of the world. Developing countries in the ASEAN region are often vulnerable to experiencing external imbalances which are reflected in their current account balance, which every year the country continues to fluctuate and tends to decrease until it experiences a current account deficit. This research was conducted to analyze the impact of monetary policy and macroeconomic indicators on the current account situation of developing countries in the ASEAN region during the 15 year period of 2007–2021. The Current Account Balance as the dependent variable and the independent variable uses Interest Rates in explaining monetary policy and macroeconomic variables including Exchange Rate, Inflation, Gross Domestic Product, Foreign Direct Investment, and Trade Openness. This study analyzes long-term and short-term effects using the VECM panel model. The results show that Interest Rates in the short term has no effect, but in the longer term has a significant negative effect. The Exchange Rate in the short term and long term have a significant positive effect. Inflation and GDP have no effect in the short term but have a significant negative effect in the long term. FDI has a significant positive effect in the short term and the long term. And finally, Trade Openness in the short term has a significant positive and in the long term has a significant negative effect. Keywords: current account balance, interest rate, macroeconomic, VECM panel

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Determinant of Trade Balance: Empirical Study in ASEAN 5 Countries

Purnamasari,

Zuhroh,

Kurniawati

2022

JEP

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International trade is a form of partnership and global activity of a country with other countries, traded from exports and imports. International trade activity is recorded in the trade balance for a certain period based on the value of the prevailing currency. It is one of the benchmarks for the success of an economy. This study examines the relationship between fundamental macroeconomic variables consisting of inflation, interest rates, imports, exchange rates, and GDP, which affect the trade balance performance in ASEAN-5 (Indonesia, Malaysia, Philippines, Singapore, and Thailand). The analytical method used is a regression with panel data from 2000-2019 with research objects from ASEAN-5 countries. The results of the analysis found that interest rates and imports had a significant adverse effect on the trade balance in ASEAN-5. GDP and exchange rates significantly positively affect the trade balance of ASEAN-5 countries. On the other hand, inflation has a negative effect but does not significantly affect the trade balance in ASEAN-5 countries.

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Macroeconomic Variables and Current Account Balance in an Open Economy: Evidence from Namibia

Cited by 8 publications

References 8 publications

The Effects of Global Value Chain Participation on Current Account Balances in African Economies: Does it Matter Being a Landlocked Country?: An Empirical Review

The Effects of Global Value Chain Participation on Current Account Balances in African Economies: Does it Matter Being a Landlocked Country?: An Empirical Review

The Impact of Monetary Policy and Macroeconomic Indicators on the Current Account in Developing ASEAN

Determinant of Trade Balance: Empirical Study in ASEAN 5 Countries

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