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Export Trade and Real Exchange Rate Dynamics in Sub-Saharan Africa: A Dynamic Panel Analysis

Author

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  • Kenneth Chikezie Anyalechi

    (Department of Finance and Banking, University of Port Harcourt, Nigeria.)

  • Emeka Okereke

    (Department of Finance and Banking, University of Port Harcourt, Nigeria.)

  • Ikechukwu S. Nnamdi

    (Department of Finance and Banking, University of Port Harcourt, Nigeria.)

Abstract

The effect of exchange rate variation on international trade becomes one of the critical issues for economic policy makers. Debates around this issue come to the fore because there is no consensus on whether variations in exchange rate affect foreign trade activity. In this direction, Khosa, Botha and Pretorius, (2015) argued that a cursory look at raw data without in-depth analysis, makes it difficult to establish the nature of the relationship between exchange rate variations and trade, while lack of clarity on this subject increases the risk of improper planning by international trade partners as well as implementation of economic policies. Hence, real exchange rate is widely considered an important macroeconomic measure which underlies the adoption of certain economic policies (Kurtovic, Halili & Maxhuni, 2017; Hunegnaw, 2017). Even though the study in this area is not yet conclusive, there is a general consensus among professionals that exchange rate influences trade balance in the long run (Chaudhary, Hashmi & Khan, 2016).

Suggested Citation

  • Kenneth Chikezie Anyalechi & Emeka Okereke & Ikechukwu S. Nnamdi, 2020. "Export Trade and Real Exchange Rate Dynamics in Sub-Saharan Africa: A Dynamic Panel Analysis," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(9), pages 222-227, September.
    • Handle: RePEc:bcp:journl:v:4:y:2020:i:9:p:222-227
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    References listed on IDEAS

    as
    1. Goodness C. Aye & Rangan Gupta & Prudence S. Moyo & Nehrunaman Pillay, 2015. "The Impact of Exchange Rate Uncertainty on Exports in South Africa," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(01), pages 1-14.
    2. Bogale Hunegnaw, Fetene, 2017. "Real Exchange Rate and Manufacturing Export Competitiveness in Eastern Africa," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 32(4), pages 891-912.
    3. Christelle Meniago & Joel Hinaunye Eita, 2017. "Does Exchange Rate Volatility Deter Trade in Sub-Saharan Africa?," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 62-69.
    4. Wilson Chamunorwa & Ireen Choga, 2015. "Exchange Rate Volatility and Export Performance in South Africa: (2000-2014)," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(10), pages 1174-1186, October.
    5. Christelle Meniago & Joel Hinaunye Eita, 2017. "The effects of exchange rate changes on Sub-Saharan Africa trade," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 9(3), pages 213-230.
    6. Wilson Chamunorwa & Ireen Choga, 2015. "Exchange Rate Volatility and Export Performance in South Africa: (2000-2014)," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(10), pages 1174-1186.
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