Economic interdependence and bilateral trade imbalance across the Taiwan Strait
Purpose – Despite a growing interest in research, no existing study explores the nature of, and the relationship between, the real exchange rate and trade imbalance between Taiwan and China. These economies were admitted to the World Trade Organization in late 2001 (China) and in January 2002 (Taiwan). This study aims to redress this deficiency. Design/methodology/approach – Using Johansen's cointegration approach and bilateral trade data, the study reveals overwhelming evidence of a stable long-run relationship of the real exchange rate and bilateral trade balance between Taiwan and its trading partners: China, the USA, Japan, Korea, Hong Kong and Singapore. Findings – The evidence indicates that the currency depreciation of the New Taiwan dollar improves Taiwan's bilateral trade balance, except with China. Originality/value – The findings imply that Taiwan cannot resolve the cross-Strait trade imbalance alone via the currency depreciation, and macroeconomic adjustments, including application of the WTO rules, currency exchange and imports of Chinese goods, need to be negotiated on both sides of the Taiwan Strait.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 36 (2009)
Issue (Month): 4 (September)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://www.emeraldinsight.com/jes.htm Email:
When requesting a correction, please mention this item's handle: RePEc:eme:jespps:v:36:y:2009:i:4:p:411-432. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.