IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/41519.html
   My bibliography  Save this paper

Export, Economic Integration and Exchange Rate Volatility in Turkey and Malaysia

Author

Listed:
  • masron, Tajul arrifin
  • Mohd naseem niaz, Ahmad

Abstract

Using annual data (1970-2004), this study re-examined the hypothesis that exchange rate volatility may dampen export demand in Malaysia and Turkey. In particular, this study attempts to investigate the impact of exchange rate volatility on exports after taking into consideration the presence of regional economic integration. In addition, the role of regional economic integration in promoting export is also of concern to this study. The empirical evidence demonstrates that despite the significant, minimal impact of membership to regional economic integration for both economies, regional integration remains an important and valid approach for future economic development for both economies. Meanwhile, similar to the findings of previous studies the impact of exchange rate volatility on exports is consistently negative. However, it is no longer significant in the case of Turkey.

Suggested Citation

  • masron, Tajul arrifin & Mohd naseem niaz, Ahmad, 2008. "Export, Economic Integration and Exchange Rate Volatility in Turkey and Malaysia," MPRA Paper 41519, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:41519
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/41519/1/MPRA_paper_41519.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Harald Badinger, 2005. "Growth Effects of Economic Integration: Evidence from the EU Member States," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(1), pages 50-78, April.
    2. 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.
    3. Arize, Augustine C & Osang, Thomas & Slottje, Daniel J, 2000. "Exchange-Rate Volatility and Foreign Trade: Evidence from Thirteen LDC's," Journal of Business & Economic Statistics, American Statistical Association, vol. 18(1), pages 10-17, January.
    4. Klein, Michael W., 1990. "Sectoral effects of exchange rate volatility on United States exports," Journal of International Money and Finance, Elsevier, vol. 9(3), pages 299-308, September.
    5. Patrick Vanhoudt, 1999. "Did the European unification induce economic growth? In search of scale effects and persistent changes," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(2), pages 193-220, June.
    6. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    7. Chowdhury, Abdur R, 1993. "Does Exchange Rate Volatility Depress Trade Flows? Evidence from Error-Correction Models," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 700-706, November.
    8. Vamvakidis, Athanasios, 2002. "How Robust Is the Growth-Openness Connection? Historical Evidence," Journal of Economic Growth, Springer, vol. 7(1), pages 57-80, March.
    9. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    10. Rahmatsyah, Teuku & Rajaguru, Gulasekaran & Siregar, Reza Y., 2002. "Exchange-rate volatility, trade and "fixing for life" in Thailand," Japan and the World Economy, Elsevier, vol. 14(4), pages 445-470, December.
    11. Arize, A. C., 1997. "Foreign trade and exchange-rate risk in the G-7 countries: Cointegration and error-correction models," Review of Financial Economics, Elsevier, vol. 6(1), pages 95-112.
    12. Tajul Ariffin Masron & Zulkornain Yusop, 2006. "Optimum Currency Area Criteria and Volatility in ASEAN," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 2(2), pages 1-18.
    13. Bollerslev, Tim, 1986. "Generalized autoregressive conditional heteroskedasticity," Journal of Econometrics, Elsevier, vol. 31(3), pages 307-327, April.
    14. McKenzie, Michael D. & Brooks, Robert D., 1997. "The impact of exchange rate volatility on German-US trade flows," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 7(1), pages 73-87, April.
    15. Henrekson, Magnus & Torstensson, Johan & Torstensson, Rasha, 1997. "Growth effects of European integration," European Economic Review, Elsevier, vol. 41(8), pages 1537-1557, August.
    16. Baldwin, Richard & Seghezza, Elena, 1996. "Growth and European Integration: Towards an Empirical Assessment," CEPR Discussion Papers 1393, C.E.P.R. Discussion Papers.
    17. Levine, Ross & Carkovic, Maria, 2001. "How Much Bang for the Buck? Mexico and Dollarization," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(2), pages 339-363, May.
    18. Sanjeev Gupta, 1980. "An application of the monetary approach to black market exchange rates," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 116(2), pages 235-252, June.
    19. Viaene, Jean-Marie & de Vries, Casper G., 1992. "International trade and exchange rate volatility," European Economic Review, Elsevier, vol. 36(6), pages 1311-1321, August.
    20. Ferda Halicioglu, 2007. "A Multivariate Causality Analysis of Export and Growth for Turkey," EERI Research Paper Series EERI_RP_2007_05, Economics and Econometrics Research Institute (EERI), Brussels.
    21. Maurice Obstfeld & Kenneth Rogoff, 1995. "The Mirage of Fixed Exchange Rates," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 73-96, Fall.
    22. Erzan, Refik & Filiztekin, Alpay & Zenginobuz, Unal, 2002. "Turkey’s Customs Union with the European Union: A Framework for Evaluating the Impact of Economic Integration," MPRA Paper 382, University Library of Munich, Germany.
    23. Aristotelous, Kyriacos, 2001. "Exchange-rate volatility, exchange-rate regime, and trade volume: evidence from the UK-US export function (1889-1999)," Economics Letters, Elsevier, vol. 72(1), pages 87-94, July.
    24. Hadi Soesastro, 2005. "Accelerating ASEAN Economic Integration - Moving Beyond AFTA," Trade Working Papers 22034, East Asian Bureau of Economic Research.
    25. Mckenzie, Michael D., 1998. "The impact of exchange rate volatility on Australian trade flows," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 8(1), pages 21-38, January.
    26. 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.
    27. Prema-chandra Athukorala & Jayant Menon, 1999. "Outward Orientation and Economic Development in Malaysia," The World Economy, Wiley Blackwell, vol. 22(8), pages 1119-1139, November.
    28. Dan Ben-David, 1993. "Equalizing Exchange: Trade Liberalization and Income Convergence," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 653-679.
    29. Madsen, J., 1991. "Accounting for Supply, Integration and Income in Foreign Trade," Papers 230, Australian National University - Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ronald Miranda & Gabriela Mordecki, 2015. "Real exchange rate volatility impact on exports: A comparative study 1990-2013," Documentos de Trabajo (working papers) 15-18, Instituto de Economía - IECON.

    More about this item

    Keywords

    Export; Exchange rate volatility; Economic integration.;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F31 - International Economics - - International Finance - - - Foreign Exchange

    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:pra:mprapa:41519. 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: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.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.