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Long-Run Determinants of Japanese Import Flows from USA and China : A Sectoral Approach

Author

Listed:
  • Jacques Jaussaud

    (CREG - Centre de recherche et d'études en gestion - UPPA - Université de Pau et des Pays de l'Adour)

  • Serge Rey

    (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour)

Abstract

We analyze the determinants of the sectoral Japanese imports from her two main partners, China and the USA over the period 1971-2007. We estimate cointegration relationships with breaks, using the Saikkonen-Lütkepohl method. For six sectors: foods, raw materials, textile, mineral fuel, chemicals and machinery and equipment, we show that if the domestic demand affects positively the imports, the impact of prices changes can be different whether we retain the relative prices (homogeneity hypothesis) or we consider both domestic and import, while when we decompose the relative prices between imports prices and domestic (corporate) prices, except in one case (textile imports from the USA), we can reject the homogeneity hypothesis. A possible explanation is the greater volatility of import prices compared to domestic prices which leads importers to wait when import prices change, insofar as they don't if these changes are temporary or permanent.

Suggested Citation

  • Jacques Jaussaud & Serge Rey, 2009. "Long-Run Determinants of Japanese Import Flows from USA and China : A Sectoral Approach," Working papers of CATT hal-01880360, HAL.
    • Handle: RePEc:hal:wpcatt:hal-01880360
    Note: View the original document on HAL open archive server: https://univ-pau.hal.science/hal-01880360
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    References listed on IDEAS

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    1. Petoussis, E, 1985. "The Aggregate Import Equation: Price Homogeneity and Monetary Effects," Empirical Economics, Springer, vol. 10(2), pages 91-101.
    2. Matei Demetrescu & Helmut Lütkepohl & Pentti Saikkonen, 2009. "Testing for the cointegrating rank of a vector autoregressive process with uncertain deterministic trend term," Econometrics Journal, Royal Economic Society, vol. 12(3), pages 414-435, November.
    3. Saikkonen, Pentti & Lütkepohl, Helmut, 2002. "Testing For A Unit Root In A Time Series With A Level Shift At Unknown Time," Econometric Theory, Cambridge University Press, vol. 18(2), pages 313-348, April.
    4. Saikkonen, Pentti & Lutkepohl, Helmut, 2000. "Testing for the Cointegrating Rank of a VAR Process with Structural Shifts," Journal of Business & Economic Statistics, American Statistical Association, vol. 18(4), pages 451-464, October.
    5. Jacques Jaussaud & Serge Rey, 2009. "Real Exchange Rate and Japanese Imports from China and USA," Post-Print hal-01879892, HAL.
    6. Markku Lanne & Helmut Lütkepohl & Pentti Saikkonen, 2002. "Comparison of unit root tests for time series with level shifts," Journal of Time Series Analysis, Wiley Blackwell, vol. 23(6), pages 667-685, November.
    7. A. C. Arize & S. S. Shwiff, 1998. "Does exchange-rate volatility affect import flows in G-7 Countries? Evidence from cointegration models," Applied Economics, Taylor & Francis Journals, vol. 30(10), pages 1269-1276.
    8. Lanne, Markku & Lutkepohl, Helmut, 2002. "Unit root tests for time series with level shifts: a comparison of different proposals," Economics Letters, Elsevier, vol. 75(1), pages 109-114, March.
    9. Saikkonen, Pentti & Lütkepohl, Helmut, 2000. "Testing For The Cointegrating Rank Of A Var Process With An Intercept," Econometric Theory, Cambridge University Press, vol. 16(3), pages 373-406, June.
    10. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    11. Lutkepohl, Helmut & Saikkonen, Pentti, 2000. "Testing for the cointegrating rank of a VAR process with a time trend," Journal of Econometrics, Elsevier, vol. 95(1), pages 177-198, March.
    12. Serge Rey, 2006. "Effective Exchange Rate Volatility And Mena Countries Exports To The Eu," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 31(2), pages 23-54, December.
    13. Robert Z. Lawrence & David E. Weinstein, 1999. "Trade and Growth: Import-Led or Export-Led? Evidence From Japan and Korea," NBER Working Papers 7264, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Jacques Jaussaud & Serge Rey, 2012. "FDI to Japan and Trade Flows: A Comparison of BRICs, Asian Tigers and Developed Countries," Working Papers hal-01880347, HAL.
    2. Khaled Chnaina & Farid Makhlouf, 2015. "Impact des Transferts de Fonds sur le Taux de Change Réel Effectif en Tunisie," African Development Review, African Development Bank, vol. 27(2), pages 145-160, June.
    3. Jacques Jaussaud & Serge Rey, 2012. "FDI to Japan and Trade Flows: A Comparison of BRICs, Asian Tigers and Developed Countries," Working papers of CATT hal-01880347, HAL.
    4. Khaled Chnaina & Farid Makhlouf, 2015. "Impact des Transferts de Fonds sur le Taux de Change Réel Effectif en Tunisie," African Development Review, African Development Bank, vol. 27(2), pages 145-160, June.
    5. Khaled Chnaina & Farid Makhlouf, 2012. "Impact des Transferts de Fonds sur le Taux de Change Réel Effectif en Tunisie," Working papers of CATT hal-01885155, HAL.

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    More about this item

    Keywords

    Exchange rate; Yen; International Trade; Japan; Imports; Long-run relationships;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F39 - International Economics - - International Finance - - - Other

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