IDEAS home Printed from https://ideas.repec.org/a/arh/jrujec/v7y2021i3p213-232.html
   My bibliography  Save this article

The impact of exchange rate volatility on trade: The evidence from Russia

Author

Listed:
  • Irina Tarasenko

    (World Trade Organization, Geneva, Switzerland)

Abstract

This paper analyzes the effects of exchange rate volatility on exports and imports of a range of goods between Russia and its 70 trading partners from 2004 until 2018. The goods in question fall into eight product categories, as follows: (i) agricultural raw materials­; (ii) chemicals; (iii) food; (iv) fuels; (v) manufactured goods; (vi) ores and metals­; (vii) textiles; and (viii) machinery and transport equipment. Exchange rate volatility­ is measured using the standard deviation of the first difference in the logarithmic daily nominal exchange rate. The paper concludes that exchange rate volatility had a negative impact on exports of agricultural raw materials, manufactured goods, and machinery and transport equipment. In contrast, it was found to have a positive and significant impact on trade in fuels and imports of chemicals and textiles.

Suggested Citation

  • Irina Tarasenko, 2021. "The impact of exchange rate volatility on trade: The evidence from Russia," Russian Journal of Economics, ARPHA Platform, vol. 7(3), pages 213-232, December.
    • Handle: RePEc:arh:jrujec:v:7:y:2021:i:3:p:213-232
    DOI: 10.32609/j.ruje.7.57933
    as

    Download full text from publisher

    File URL: https://rujec.org/article/57933/
    Download Restriction: no
    File URL: https://libkey.io/10.32609/j.ruje.7.57933?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Naseem, N.A.M & Tan, Hui-Boon & Hamizah, M.S, 2008. "Exchange Rate Misalignment, Volatility and Import Flows in Malaysia," MPRA Paper 41571, University Library of Munich, Germany.
    2. Akram Shavkatovich Hasanov Author_Email: & Ahmad Zubaidi Baharumshah & Mahendran Shitan & Zainidin Karimovich Eshkuvatov, 2011. "Exchange Rate Risk And Trade Flows: A Gravity Equation Approach," 2nd International Conference on Business and Economic Research (2nd ICBER 2011) Proceeding 2011-312, Conference Master Resources.
    3. Mr. Peter B. Clark & Shang-Jin Wei & Ms. Natalia T. Tamirisa & Mr. Azim M Sadikov & Mr. Li Zeng, 2004. "A New Look at Exchange Rate Volatility and Trade Flows," IMF Occasional Papers 2004/009, International Monetary Fund.
    4. Hasanov Akram, 2011. "Exchange rate risk and trade flows: the case of Belarus, Kazakhstan, Russia, and Ukraine," EERC Working Paper Series 11/09e, EERC Research Network, Russia and CIS.
    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. Mahnaz Muhammad Ali & Muhammad Muzammil & Ayesha Umar, 2022. "The Exchange Rate Volatility and Exports Growth of the Selected Developed Economies," Journal of Economic Impact, Science Impact Publishers, vol. 4(2), pages 51-57.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wu, Po-Chin & Liu, Shiao-Yen & Pan, Sheng-Chieh, 2013. "Nonlinear bilateral trade balance-fundamentals nexus: A panel smooth transition regression approach," International Review of Economics & Finance, Elsevier, vol. 27(C), pages 318-329.
    2. Stefano Schiavo, 2008. "Financial Integration, GDP Correlation and the Endogeneity of Optimum Currency Areas," Economica, London School of Economics and Political Science, vol. 75(297), pages 168-189, February.
    3. Bas Straathof & Paolo Calio, 2012. "Currency derivatives and the disconnection between exchange rate volatility and international trade," CPB Discussion Paper 203, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Xiaohua Bao & Hailiang Huang & Larry D Qiu & Xiaozhuo Wang, 2022. "Exchange rate expectations and exports: Firm-level evidence from China," Discussion Papers 2022-07, University of Nottingham, GEP.
    5. International Monetary Fund, 2005. "Morocco: Selected Issues; Morocco: Selected Issues," IMF Staff Country Reports 05/419, International Monetary Fund.
    6. Komain Jiranyakul, 2013. "Exchange Rate Uncertainty and Import Demand of Thailand," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(10), pages 1269-1280, October.
    7. Nasha Maveé & Mr. Roberto Perrelli & Mr. Axel Schimmelpfennig, 2016. "Surprise, Surprise: What Drives the Rand / U.S. Dollar Exchange Rate Volatility?," IMF Working Papers 2016/205, International Monetary Fund.
    8. Allison Roehling, 2021. "Implications of exchange rate volatility for trade: Volatility measurement matters," Review of International Economics, Wiley Blackwell, vol. 29(5), pages 1486-1523, November.
    9. Ruipeng Liu & Riza Demirer & Rangan Gupta & Mark E. Wohar, 2017. "Do Bivariate Multifractal Models Improve Volatility Forecasting in Financial Time Series? An Application to Foreign Exchange and Stock Markets," Working Papers 201728, University of Pretoria, Department of Economics.
    10. Hussaini Umaru & Aguda Niyi A. & Nordiana Osagie Davies, 2018. "The Effects of Exchange Rate Volatility on Economic Growth of West African English-Speaking Countries," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 8(4), pages 131-143, October.
    11. Nabi, Amina Ghulam & Khan, Usman Ullah, 2015. "Exchange Rate Volatility and Import Demand Function: A Comparative Analysis of Selected SAARC Countries," MPRA Paper 105066, University Library of Munich, Germany.
    12. Dai, Yanke & Li, Baoxin & Xu, Yangfei, 2023. "International transmission of exchange rate volatility: Evidence from FIEs’ investments in China," Journal of Multinational Financial Management, Elsevier, vol. 68(C).
    13. Tscheke, Jan, 2016. "Operational Hedging of Exchange Rate Risks," Discussion Papers in Economics 30227, University of Munich, Department of Economics.
    14. Atish R Ghosh & Mahvash S Qureshi & Charalambos G Tsangarides, 2019. "Friedman Redux: External Adjustment and Exchange Rate Flexibility," The Economic Journal, Royal Economic Society, vol. 129(617), pages 408-438.
    15. Tomáš Havránek, 2009. "Rose Effect and the Euro: The Magic is Gone," Working Papers IES 2009/20, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Aug 2009.
    16. n.a.m, Naseem & m.s, Hamizah, 2013. "Exchange Rate Misalignment and Economic Growth: Recent Evidence in Malaysia," MPRA Paper 52447, University Library of Munich, Germany.
    17. Ms. Kazuko Shirono, 2007. "Real Effects of Common Currencies in East Asia," IMF Working Papers 2007/166, International Monetary Fund.
    18. Jamal Bouoiyour & Refk Selmi, 2016. "A Synthesis of the Effects of Exchange Rate Volatility on International Trade: A Meta-Regression Analysis," The International Trade Journal, Taylor & Francis Journals, vol. 30(4), pages 263-294, August.
    19. Campbell, Douglas L., 2011. "Estimating the impact of currency unions on trade using a dynamic gravity framework," MPRA Paper 35531, University Library of Munich, Germany.
    20. Hayakawa, Kazunobu & Kimura, Fukunari, 2008. "The Effect of Exchange Rate Volatility on International Trade: The Implication for Production Networks in East Asia," IDE Discussion Papers 156, Institute of Developing Economies, Japan External Trade Organization(JETRO).

    More about this item

    Keywords

    exchange rate volatility gravity model instrumental variable exports imports;

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market

    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:arh:jrujec:v:7:y:2021:i:3:p:213-232. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Teodor Georgiev (email available below). General contact details of provider: https://rujec.org/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.