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Exchange Rate Volatility and Export Volume: The Case of Indonesia and its Main Trading Partners

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  • Sugiharso Safuan

Abstract

This paper examines the impact of exchange rate volatility on Indonesia's export to-United States, Japan and China using both aggregate and disaggregate data. We first estimated each pair country with export demand equations based on data from 1996 to 2014. A set of export demand equations is estimated by using Seemingly Unrelated Regression to characterized the correlation of the disturbances across equations. In general, the estimation result shows that exchange rate volatility has negative impact on export. Estimations based on disaggregate data indicate that the impact of the exchange rate volatility on exports remains negative however it varies among industries in the countries under investigation.

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  • Sugiharso Safuan, 2017. "Exchange Rate Volatility and Export Volume: The Case of Indonesia and its Main Trading Partners," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 3-13.
    • Handle: RePEc:ers:journl:v:xx:y:2017:i:3a:p:3-13
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    References listed on IDEAS

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    Cited by:

    1. Adedeji Daniel Gbadebo, 2023. "Does Exchange Rates Swings Affect Trade? Evidence from an Emerging Open Economy," International Journal of Economics and Financial Issues, Econjournals, vol. 13(1), pages 132-143, January.
    2. Viviane Naimy & Rim El Khoury & José-María Montero & Jana Souk, 2023. "Post-Brexit exchange rate volatility and its impact on UK exports to eurozone countries: A bounds testing approach," Oeconomia Copernicana, Institute of Economic Research, vol. 14(1), pages 135-168, March.
    3. Vietha Devia S.S., 2019. "The Correlation of Exchange Rate and Inflation and Its Effect on Stock Markets. Case Study on Consumer Good Index Indonesia: 2004 – 2017," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(2), pages 32-44, June.
    4. Innocent U Duru & Millicent Adanne Eze & Abubakar Sadiq Saleh & Benedict I Uzoechina & Gabriel O Ebenyi & Ekechi Chukwuka, 2022. "Exchange Rate Volatility and Exports: The Nigerian Scenario," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 12(1), pages 11-28.

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