Non-linear effect of exchange rate volatility on exports: the role of financial sector development in emerging East Asian economies
AbstractThis paper empirically examines the role of financial sector development in influencing the impact of exchange rate volatility on the exports of five emerging East Asian countries - China, Indonesia, Malaysia, the Philippines and Thailand - using a GMM-IV estimation method. The results indicate that the effect of exchange rate volatility on exports is conditional on the level of financial sector development. The less financially developed an economy, the more its exports are adversely affected by exchange rate volatility. In addition, a stable exchange rate seems to be a necessary condition to achieve export promotion via a currency depreciation in these economies.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal International Review of Applied Economics.
Volume (Year): 25 (2011)
Issue (Month): 1 ()
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- Pomfret, Richard & Pontines, Victor, 2013.
"Exchange Rate Policy and Regional Trade Agreements: A Case of Conflicted Interests?,"
ADBI Working Papers
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- Richard Pomfret & Victor Pontines, 2013. "Exchange Rate Policy and Regional Trade Agreements : A Case of Conflicted Interests?," Trade Working Papers 23713, East Asian Bureau of Economic Research.
- Richard Pomfret & Victor Pontines, 2013. "Exchange Rate Policy and Regional Trade Agreements : A Case of Conflicted Interests?," Finance Working Papers 23713, East Asian Bureau of Economic Research.
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