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An Analysis of Hong Kong Export Performance

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  • Cheung, Yin-Wong

Abstract

The article examines the Hong Kong export performance. A standard export demand formulation is used as the benchmark. Then, we investigate the effects of real exchange rate volatility, “third” country competition, domestic wages, and costs of imports from China on export volume. The study models the Hong Kong domestic exports and re-exports separately, compares the performance of exports to the rest of the world, US and Japan, and uses destination-and-export-type specific unit value indexes to construct real exchange rates. It is found that Hong Kong export performance varies across export types and across destinations. In general, Hong Kong exports display mean-reverting dynamics, are positively influenced by foreign income, and are adversely affected by high value of its currency. The lagged export variable, foreign income, and real exchange rate provide most of the explanatory power. The other variables contribute only marginally in explaining the variability of Hong Kong exports.

Suggested Citation

  • Cheung, Yin-Wong, 2003. "An Analysis of Hong Kong Export Performance," Santa Cruz Department of Economics, Working Paper Series qt5r02w66n, Department of Economics, UC Santa Cruz.
    • Handle: RePEc:cdl:ucscec:qt5r02w66n
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    References listed on IDEAS

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    1. Cheung, Yin-Wong & Lai, Kon S, 1995. "Lag Order and Critical Values of the Augmented Dickey-Fuller Test," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(3), pages 277-280, July.
    2. Morris Goldstein & Mohsin S. Khan, 2017. "Income and Price Effects in Foreign Trade," World Scientific Book Chapters, in: TRADE CURRENCIES AND FINANCE, chapter 1, pages 3-81, World Scientific Publishing Co. Pte. Ltd..
    3. Hooper, Peter & Kohlhagen, Steven W., 1978. "The effect of exchange rate uncertainty on the prices and volume of international trade," Journal of International Economics, Elsevier, vol. 8(4), pages 483-511, November.
    4. Agathe Côté, "undated". "Exchange Rate Volatility and Trade: A Survey," Staff Working Papers 94-5, Bank of Canada.
    5. Yin‐Wong Cheung, 2005. "An Analysis Of Hong Kong Export Performance," Pacific Economic Review, Wiley Blackwell, vol. 10(3), pages 323-340, October.
    6. Cheung, Yin-Wong & Lai, Kon S, 1993. "Finite-Sample Sizes of Johansen's Likelihood Ration Tests for Conintegration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(3), pages 313-328, August.
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    Cited by:

    1. Yin‐Wong Cheung, 2005. "An Analysis Of Hong Kong Export Performance," Pacific Economic Review, Wiley Blackwell, vol. 10(3), pages 323-340, October.
    2. Menzie Chinn, 2006. "A Primer on Real Effective Exchange Rates: Determinants, Overvaluation, Trade Flows and Competitive Devaluation," Open Economies Review, Springer, vol. 17(1), pages 115-143, January.

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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