Exchange Rate Volatility and Exports: New Empirical Evidence from the Emerging East Asian Economies

Middlesex University Economics and Statistics Discussion Paper No. 127

34 Pages Posted: 8 Jul 2008

See all articles by Myint Moe Chit

Myint Moe Chit

Middlesex University

Marian Rizov

University of Lincoln (UK) - Lincoln International Business School; Lincoln Economics and Finance (LEAF) Research Group

Dirk Willenbockel

University of Sussex - Institute of Development Studies

Multiple version iconThere are 2 versions of this paper

Date Written: April 2008

Abstract

This paper examines the impact of bilateral real exchange rate volatility on real exports of five emerging East Asian countries among themselves as well as to thirteen industrialised countries. We explicitly recognize the specificity of the exports between the emerging East Asian and industrialised countries and employ a generalized gravity model that combines a traditional long-run export demand model with gravity type variables. In the empirical analysis we use a panel comprising 25 years of quarterly data and perform unit-root and cointegration tests to verify the long-run relationship among the regression variables. The results provide strong evidence that exchange rate volatility has a negative impact on the exports of emerging East Asian countries. These results are robust across different estimation techniques and do not depend on the variable chosen to proxy exchange rate uncertainty.

Keywords: Trade, Uncertainty, Exchangerate volatility, Emerging economies, East Asia

JEL Classification: F14, F31, O53

Suggested Citation

Chit, Myint Moe and Rizov, Marian and Willenbockel, Dirk, Exchange Rate Volatility and Exports: New Empirical Evidence from the Emerging East Asian Economies (April 2008). Middlesex University Economics and Statistics Discussion Paper No. 127, Available at SSRN: https://ssrn.com/abstract=1157035 or http://dx.doi.org/10.2139/ssrn.1157035

Myint Moe Chit

Middlesex University ( email )

The Burroughs
London, NW4 4BT
United Kingdom

Marian Rizov

University of Lincoln (UK) - Lincoln International Business School ( email )

Brayford Pool
Lincoln, LN6 7TS
United Kingdom

Lincoln Economics and Finance (LEAF) Research Group ( email )

United Kingdom

Dirk Willenbockel (Contact Author)

University of Sussex - Institute of Development Studies ( email )

Brighton
Falmer, Brighton, East Sussex BN1 9RE
United Kingdom

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