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Examining the Asymmetric Effects of Third-Country Exchange Rate Volatility on Pakistan–China Commodity Trade

Author

Listed:
  • Ahmed Usman

    (Department of Economics, Government College University Faisalabad, Faisalabad, Pakistan)

  • Nicholas Apergis

    (The University of Texas at El Paso, El Paso, TX 79968, USA)

  • Sofia Anwar

    (Department of Economics, Government College University Faisalabad, Faisalabad, Pakistan)

Abstract

Keeping in view the idea of the third-country effect by Cushman, the analysis attempts to capture the asymmetric impact of third-country exchange rate volatility on Pakistan–China commodity trade. The empirical analysis is based on the annual data for 14 industries that export from Pakistan to China and 34 industries that import to Pakistan from China. The findings of the study confirm that nonlinear models generate more significant results both in the short and long runs. Moreover, the empirical findings suggest that the asymmetric assumption alone is not enough, and instead, we should use it along with the third economy effect.

Suggested Citation

  • Ahmed Usman & Nicholas Apergis & Sofia Anwar, 2021. "Examining the Asymmetric Effects of Third-Country Exchange Rate Volatility on Pakistan–China Commodity Trade," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 12(02), pages 1-39, June.
    • Handle: RePEc:wsi:jicepx:v:12:y:2021:i:02:n:s1793993321500083
    DOI: 10.1142/S1793993321500083
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    Cited by:

    1. Lee, Chien-Hui & Li, Shu-Hui & Lee, Jen-Yu, 2022. "An asymmetric impact analysis of the exchange rate volatility on commodity trade between the U.S. and China," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 399-415.

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