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Mineral import behavior in response to shocks: A nonlinear perspective

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  • Zambrano-Monserrate, Manuel A.

Abstract

The global economic dependence on mineral imports stands as a pivotal concern motivating this study. Given the uneven distribution of these natural resources worldwide, numerous economies have had to resort to international trade to meet their domestic demand. Despite the significance of this phenomenon, existing literature on the subject has only scratched the surface of the complexities underlying the dynamics of mineral imports. In this context, the current research aims to address this gap by examining the interplay between mineral imports and various factors, such as renewable electricity, oil and mineral prices, gross domestic product (GDP), and exchange rates. In contrast to conventional research methods, the Panel Vector Autoregressive (PVAR) methodology is employed, estimated through the System Generalized Method of Moments (System GMM). This methodological choice offers notable advantages in adequately addressing heteroscedasticity and endogeneity, demonstrating efficiency even in small sample sizes. The key findings of this study reveal a nonlinear relationship between mineral imports and the specified variables. This implies that, in response to a positive shock in a given variable, the demand for mineral imports may either increase or decrease, depending on the time horizon considered in the evaluation.

Suggested Citation

  • Zambrano-Monserrate, Manuel A., 2024. "Mineral import behavior in response to shocks: A nonlinear perspective," Research in Economics, Elsevier, vol. 78(1), pages 14-24.
    • Handle: RePEc:eee:reecon:v:78:y:2024:i:1:p:14-24
    DOI: 10.1016/j.rie.2024.01.006
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