IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v49y2017i46p4668-4678.html
   My bibliography  Save this article

Do exchange rate changes have symmetric or asymmetric effects on the trade balances of Asian countries?

Author

Listed:
  • Mohsen Bahmani-Oskooee
  • Tatchawan Kanitpong

Abstract

Recently the linear ARDL approach was modified and a non-linear version of the same approach that is used mostly to assess asymmetric effects of some exogenous variables on the dependent variable was introduced. The non-linear model was recently used by one study to show that indeed exchange rate changes have asymmetric effects on the trade balance of a few advanced countries. The same was demonstrated for transition economies by another study. In this article, we provide additional asymmetric effects from seven Asian economies by showing that in most cases we find evidence of short-run and long-run asymmetric effects of exchange rate changes on the trade balance. Like other studies, our findings are country specific.

Suggested Citation

  • Mohsen Bahmani-Oskooee & Tatchawan Kanitpong, 2017. "Do exchange rate changes have symmetric or asymmetric effects on the trade balances of Asian countries?," Applied Economics, Taylor & Francis Journals, vol. 49(46), pages 4668-4678, October.
    • Handle: RePEc:taf:applec:v:49:y:2017:i:46:p:4668-4678
    DOI: 10.1080/00036846.2017.1287867
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2017.1287867
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2017.1287867?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mahdavi, Saeid & Sohrabian, Ahmad, 1993. "The exchange value of the dollar and the U.S. trade balance: An empirical investigation based on cointegradon and Granger causality tests," The Quarterly Review of Economics and Finance, Elsevier, vol. 33(4), pages 343-358.
    2. Delatte, Anne-Laure & López-Villavicencio, Antonia, 2012. "Asymmetric exchange rate pass-through: Evidence from major countries," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 833-844.
    3. Bahmani-Oskooee, Mohsen, 1985. "Devaluation and the J-Curve: Some Evidence from LDCs," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 500-504, August.
    4. Bahmani-Oskooee, Mohsen, 1989. "Devaluation and the J-Curve: Some Evidence for LDCs: Errata," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 553-554, August.
    5. Massomeh Hajilee & Omar Al Nasser, 2014. "Exchange rate volatility and stock market development in emerging economies," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 37(1), pages 163-180.
    6. Stephen P. Magee, 1973. "Currency Contracts, Pass-Through, and Devaluation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 4(1), pages 303-325.
    7. Apergis, Nicholas & Miller, Stephen M., 2006. "Consumption asymmetry and the stock market: Empirical evidence," Economics Letters, Elsevier, vol. 93(3), pages 337-342, December.
    8. Jarita Duasa, 2007. "Determinants of Malaysian Trade Balance: An ARDL Bound Testing Approach," Global Economic Review, Taylor & Francis Journals, vol. 36(1), pages 89-102.
    9. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    10. Moffett, Michael H., 1989. "The J-curve revisited: an empirical examination for the United States," Journal of International Money and Finance, Elsevier, vol. 8(3), pages 425-444, September.
    11. Himarios, Daniel, 1985. "The effects of devaluation on the trade balance: A critical view and re- examination of Mile's `new results'," Journal of International Money and Finance, Elsevier, vol. 4(4), pages 553-563, December.
    12. Brissimis, Sophocles N. & Leventakis, John A., 1989. "The effectiveness of devaluation: A general equilibrium assessment with reference to Greece," Journal of Policy Modeling, Elsevier, vol. 11(2), pages 247-271.
    13. Halicioglu, Ferda, 2008. "The bilateral J-curve: Turkey versus her 13 trading partners," Journal of Asian Economics, Elsevier, vol. 19(3), pages 236-243, June.
    14. Noland, Marcus, 1989. "Japanese Trade Elasticities and the J-Curve," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 175-179, February.
    15. Mohsen Bahmani‐Oskooee & Scott W. Hegerty, 2010. "The J‐ and S‐curves: a survey of the recent literature," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 37(6), pages 580-596, November.
    16. Lal, Anil K. & Lowinger, Thomas C., 2002. "The J-Curve: Evidence from East Asia," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 397-415.
    17. Rose, Andrew K. & Yellen, Janet L., 1989. "Is there a J-curve?," Journal of Monetary Economics, Elsevier, vol. 24(1), pages 53-68, July.
    18. Bahmani-Oskooee, Mohsen, 1991. "Is there a long-run relation between the trade balance and the real effective exchange rate of LDCs?," Economics Letters, Elsevier, vol. 36(4), pages 403-407, August.
    19. Mohsen Bahmani-Oskooee & Artatrana Ratha, 2004. "The J-Curve: a literature review," Applied Economics, Taylor & Francis Journals, vol. 36(13), pages 1377-1398.
    20. Glauco De Vita & Khine S. Kyaw, 2008. "Determinants of capital flows to developing countries: a structural VAR analysis," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 35(4), pages 304-322, September.
    21. Mohsen Bahmani-Oskooee & Ali Kutan, 2009. "The J-curve in the emerging economies of Eastern Europe," Applied Economics, Taylor & Francis Journals, vol. 41(20), pages 2523-2532.
    22. Ferda Halicioglu, 2007. "The J‐curve dynamics of Turkish bilateral trade: a cointegration approach," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 34(2), pages 103-119, May.
    23. Bahmani-Oskooee, Mohsen & Malixi, Margaret, 1992. "More evidence on the J curve from LDCs," Journal of Policy Modeling, Elsevier, vol. 14(5), pages 641-653, October.
    24. Mohsen Bahmani-Oskooee & Hadise Fariditavana, 2015. "Nonlinear ARDL approach, asymmetric effects and the J-curve," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 42(3), pages 519-530, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mohsen Bahmani-Oskooee & Niloy Bose & Yun Zhang, 2018. "Asymmetric Cointegration, Nonlinear ARDL, and the J-Curve: A Bilateral Analysis of China and Its 21 Trading Partners," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 54(13), pages 3131-3151, October.
    2. Bahmani-Oskooee, Mohsen & Aftab, Muhammad & Harvey, Hanafiah, 2016. "Asymmetry cointegration and the J-curve: New evidence from Malaysia-Singapore commodity trade," The Journal of Economic Asymmetries, Elsevier, vol. 14(PB), pages 211-226.
    3. Mohsen Bahmani-Oskooee and Hanafiah Harvey, 2018. "The U.S. Trade Balance with Partners from Developing World: An Asymmetry Analysis of the J-Curve Effect," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 43(2), pages 29-44, June.
    4. Mohsen Bahmani-Oskooee & Muhammad Aftab, 2017. "Malaysia–Korea Commodity Trade: Are there Asymmetric Responses to Exchange Rate Changes?," Economic Papers, The Economic Society of Australia, vol. 36(2), pages 198-222, June.
    5. Mohsen Bahmani-Oskooee & Nazif Durmaz, 2020. "Asymmetric cointegration and the J-curve: evidence from commodity trade between Turkey and EU," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 47(4), pages 757-792, November.
    6. Mohsen Bahmani-Oskooee & Sujata Saha, 2017. "Asymmetric response of the US–India trade balance to exchange rate changes: Evidence from 68 industries," The World Economy, Wiley Blackwell, vol. 40(10), pages 2226-2254, October.
    7. Mohsen Bahmani-Oskooee & Sujata Saha, 2017. "Nonlinear Autoregressive Distributed Lag Approach And Bilateral J-Curve: India Versus Her Trading Partners," Contemporary Economic Policy, Western Economic Association International, vol. 35(3), pages 472-483, July.
    8. Bahmani-Oskooee, Mohsen & Halicioglu, Ferda, 2017. "Asymmetric effects of exchange rate changes on Turkish bilateral trade balances," Economic Systems, Elsevier, vol. 41(2), pages 279-296.
    9. Salah A. Nusair, 2017. "The J-Curve phenomenon in European transition economies: A nonlinear ARDL approach," International Review of Applied Economics, Taylor & Francis Journals, vol. 31(1), pages 1-27, January.
    10. Bahmani-Oskooee Mohsen & Harvey Hanafiah, 2017. "The Asymmetric Effects of Exchange Rate Changes on the Trade Balance of Singapore," Global Economy Journal, De Gruyter, vol. 17(4), pages 1-11, December.
    11. Bahmani-Oskooee, Mohsen & Harvey, Hanafiah & Halicioglu, Ferda, 2021. "Does the real exchange rate play any role in the trade between Mexico and Canada? An asymmetric analysis," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 1-21.
    12. Mohsen Bahmani-Oskooee & Huseyin Karamelikli, 2021. "The Turkey-US commodity trade and the asymmetric J-curve," Economic Change and Restructuring, Springer, vol. 54(4), pages 943-973, November.
    13. Bahmani-Oskooee, Mohsen & Baek, Jungho, 2016. "Do exchange rate changes have symmetric or asymmetric effects on the trade balance? Evidence from U.S.–Korea commodity trade," Journal of Asian Economics, Elsevier, vol. 45(C), pages 15-30.
    14. Mohsen Bahmani-Oskooee & Jungho Baek, 2019. "Asymmetry cointegration and the J-curve: new evidence from Korean bilateral trade balance models with her 14 partners," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 24(1), pages 66-81, January.
    15. Mohsen Bahmani-Oskooee & Huseyin Karamelikli, 2021. "Asymmetric J-curve: evidence from UK-German commodity trade," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(4), pages 1029-1081, November.
    16. Mohsen Bahmani-Oskooee & Muhammad Aftab, 2017. "Asymmetric Effects of Exchange Rate Changes and the J-curve: New Evidence from 61 Malaysia–Thailand Industries," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 30-46, November.
    17. Bahmani-Oskooee, Mohsen & Harvey, Hanafiah & Hegerty, Scott W., 2017. "The Japanese trade balance and asymmetric effects of yen fluctuations: Evidence using nonlinear methods," The Journal of Economic Asymmetries, Elsevier, vol. 15(C), pages 56-63.
    18. Mohsen Bahmani-Oskooee & Amirhossein Mohammadian, 2019. "Who benefits from euro depreciation in the euro zone?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(3), pages 577-595, August.
    19. Bahmani-Oskooee, Mohsen & Halicioglu, Ferda & Hegerty, Scott W., 2016. "Mexican bilateral trade and the J-curve: An application of the nonlinear ARDL model," Economic Analysis and Policy, Elsevier, vol. 50(C), pages 23-40.
    20. Bahmani-Oskooee, Mohsen & Karamelikli, Huseyin, 2018. "Japan-U.S. trade balance at commodity level and asymmetric effects of Yen-Dollar rate," Japan and the World Economy, Elsevier, vol. 48(C), pages 1-10.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:49:y:2017:i:46:p:4668-4678. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.