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Long-Run Determinants of Japanese Exports to China and the United States: A Sectoral Analysis

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  • Serge REY
  • Jacques JAUSSAUD

Abstract

We show that during the period 1971–2007, Japanese sectoral exports to China and the United States have depended on real exchange rate fluctuations and external demand (gross domestic product of the country of destination). This result holds for six sectors: foods, textile, metal products, chemicals, non-metal products, and machinery and equipment, as well as for both geographical destinations. Generally, the real exchange rate fluctuations and GDP have had the expected effects. In particular, a real appreciation of the yen and a bigger uncertainty has reduced the Japanese exports. But there is an important exception, as we find a price inelasticity of the principal Japanese exports to USA, i.e. Machinery and Equipment, which represent 80 percent of total exports to USA. So, a real depreciation of the yen may constitute an inappropriate policy to favor a process of growth export-led.

Suggested Citation

  • Serge REY & Jacques JAUSSAUD, 2009. "Long-Run Determinants of Japanese Exports to China and the United States: A Sectoral Analysis," Working Papers 4, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Nov 2009.
  • Handle: RePEc:tac:wpaper:4
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    References listed on IDEAS

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    Cited by:

    1. Cheung, Yin-Wong & Sengupta, Rajeswari, 2013. "Impact of exchange rate movements on exports: An analysis of Indian non-financial sector firms," Journal of International Money and Finance, Elsevier, vol. 39(C), pages 231-245.
    2. Yang, Wen & Liu, Yi-Cheng & Mai, Chao-Cheng, 2017. "How did Japanese exports evolve from 1995 to 2014? A spatial econometric perspective," Japan and the World Economy, Elsevier, vol. 41(C), pages 50-58.
    3. Wong Hock Tsen, 2016. "Exchange rate volatilities and disaggregated bilateral exports of Malaysia to the United States: empirical evidence," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 6(2), pages 289-314, August.

    More about this item

    Keywords

    Exchange rate; Yen; Exports; International Trade; Japan; Long-run relationships;

    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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