Exchange rate volatility and exports from East Asian countries to Japan and the USA

Saang Joon Baak, M. A. Al-Mahmood, S. Vixathep

Research output: Contribution to journalArticle

28 Citations (Scopus)

Abstract

The purpose of this article is to investigate the impact of exchange rate volatility on exports in four East Asian countries (Hong Kong, South Korea, Singapore, and Thailand). Specifically, this article aims at determining whether the bilateral real exchange rate volatility between an East Asian country and its trading partner negatively affects the exports of the East Asian country. Considering the dominant roles of the USA and Japan as trading partners of those East Asian countries, this article focuses on the quarterly export volumes of East Asian countries to the US and Japan for the period from 1981 to 2004. Except for the case of Hong Kong's exports to Japan, cointegration tests and estimations of error correction models indicate exchange rate volatility has negative impacts on exports either in the short-run or in the long-run, or both. On the other hand, the real GDP of importing countries and depreciation of real bilateral exchange rates turn out, in general, to have positive effects. Of special interest is the finding that the impact of the exchange rate volatility does not show any stylized differences depending on whether the importing country is Japan or the USA, even though dollar invoicing dominates in East Asia.

Original languageEnglish
Pages (from-to)947-959
Number of pages13
JournalApplied Economics
Volume39
Issue number8
DOIs
Publication statusPublished - 2007 May

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Asian countries
Exchange rate volatility
Japan
Bilateral
Importing
Hong Kong
Thailand
Short-run
East Asia
Error correction model
Exchange rates
Cointegration test
Depreciation
Singapore
Invoicing
South Korea
Real GDP
Real exchange rate volatility

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

Exchange rate volatility and exports from East Asian countries to Japan and the USA. / Baak, Saang Joon; Al-Mahmood, M. A.; Vixathep, S.

In: Applied Economics, Vol. 39, No. 8, 05.2007, p. 947-959.

Research output: Contribution to journalArticle

Baak, Saang Joon ; Al-Mahmood, M. A. ; Vixathep, S. / Exchange rate volatility and exports from East Asian countries to Japan and the USA. In: Applied Economics. 2007 ; Vol. 39, No. 8. pp. 947-959.
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