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Exchange Rate Volatility and Exports from East Asian Countries to Japan and the U. S

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Abstract

The purpose of this paper 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 paper aims to determine 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 U.S. and Japan as trading partners of those East Asian countries, this paper focuses on the monthly export volumes of East Asian countries to the U.S. and Japan for the period from 1990 to 2001. 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, manufacturing production indices of importing countries and depreciation of real bilateral exchange rates turn out, in general, to have positive effects on the exports of the East Asian countries examined.

Suggested Citation

  • SaangJoon Baak & Arif Al-Mahmood & Souksavanh Vixathep, 2003. "Exchange Rate Volatility and Exports from East Asian Countries to Japan and the U. S," Working Papers EMS_2003_01, Research Institute, International University of Japan.
    • Handle: RePEc:iuj:wpaper:ems_2003_01
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    File URL: https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2003_01.pdf
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    Cited by:

    1. Ronald Miranda & Gabriela Mordecki, 2015. "Real exchange rate volatility impact on exports: A comparative study 1990-2013," Documentos de Trabajo (working papers) 15-18, Instituto de Economía - IECON.
    2. SaangJoon Baak, 2004. "Exchange Rate Volatility and Trade among the Asia Pacific Countries Econometric Analysis," Working Papers EMS_2004_02, Research Institute, International University of Japan.
    3. Saang Joon Baak, 2006. "The Impact of the Chinese Renminbi on the Exports of the ROK and Japan to the US (ROK Economic System Series No.10)," Discussion papers 0604e, ERINA - Economic Research Institute for Northeast Asia.
    4. Saang Joon Baak, 2006. "The Impact of the Chinese Renminbi on the Exports of the ROK and Japan to the US (ROK Economic System Series No.10)," Discussion papers 0604, ERINA - Economic Research Institute for Northeast Asia.
    5. Kim, Sokchea, 2006. "An Analysis of Cambodia’s Trade Flows: A Gravity Model," MPRA Paper 21461, University Library of Munich, Germany.
    6. SaangJoon Baak, 2004. "Exchange Rate Volatility and Trade among the Asia Pacific Countries," Econometric Society 2004 Far Eastern Meetings 724, Econometric Society.

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    More about this item

    Keywords

    Exchange rate volatility; Export; East Asia; Cointegration; Error correction model;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • F1 - International Economics - - Trade
    • F3 - International Economics - - International Finance

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