IDEAS home Printed from https://ideas.repec.org/p/ags/iaae09/49995.html
   My bibliography  Save this paper

The Effect of China's RMB Exchange Rate Movement on Its Agricultural Export: A Case Study of Export to Japan

Author

Listed:
  • Longjiang, Chen

Abstract

This paper attempts to examine the relationship between changes and volatility of China's RMB exchange rates and its agricultural export. A model is constructed to analyze the effect of RMB exchange rate movements on agricultural exports facing two constraints including China's particular exchange rate system and TBT / SPS in agricultural trade. The model reveals that the net trade effect of RMB exchange rate movements relies on the comparison of exchange rate level change (appreciation or depreciation) effect and exchange rate risk effect. Taking China’s agricultural exports to Japan as a case, this paper makes an empirical examination. A GARCH (1, 1) model is specified to measure the exchange rate volatility and ADL regression with structural break dummy variables is estimated based on the results of unit root test with structural break. The results show RMB depreciation against yen will promote export growth while appreciation hinder export, and exchange rate volatility positively stimulates agricultural exports to Japan. However, the effect of exchange rate volatility on the export is much smaller than that of exchange rate level, which leads to a negative net effect to the export. The policy implications among the empirical results are also discussed.

Suggested Citation

  • Longjiang, Chen, 2009. "The Effect of China's RMB Exchange Rate Movement on Its Agricultural Export: A Case Study of Export to Japan," 2009 Conference, August 16-22, 2009, Beijing, China 49995, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae09:49995
    as

    Download full text from publisher

    File URL: http://purl.umn.edu/49995
    Download Restriction: no

    References listed on IDEAS

    as
    1. Barkoulas, John T. & Baum, Christopher F. & Caglayan, Mustafa, 2002. "Exchange rate effects on the volume and variability of trade flows," Journal of International Money and Finance, Elsevier, vol. 21(4), pages 481-496, August.
    Full references (including those not matched with items on IDEAS)

    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:ags:iaae09:49995. 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: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/iaaeeea.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.