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Effects of Exchange Rate Volatility on Exports: Evidence from India

Author

Listed:
  • Sidheswar Panda

    (Institute of Economic Growth)

  • Ranjan Kumar Mohanty

    (Jawaharlal Nehru University, New Delhi)

Abstract

This study empirically examines the effects of real exchange rate volatility on India's exports using time series data for the period from 1970-71 to 2011-12. This study uses a simple rolling standard deviation as a measure of exchange rate volatility and implements the Johansen cointegration technique to understand the long run relationship among the variables. This study finds that there exists one co-integrating the relationship among exports, real exchange rate volatility and World GDP. India's export volume is positively related to the World GDP. India's export volume is negatively affected by its own real exchange rate volatility. The empirical results indicate that a moderation in the exchange rate volatility can increase the export volume in case of India.

Suggested Citation

  • Sidheswar Panda & Ranjan Kumar Mohanty, 2015. "Effects of Exchange Rate Volatility on Exports: Evidence from India," Economics Bulletin, AccessEcon, vol. 35(1), pages 305-312.
    • Handle: RePEc:ebl:ecbull:eb-14-00596
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Pami Dua & Ritu Suri, 2023. "India’s Bilateral Export Growth and Exchange Rate Volatility: A Panel GMM Approach," Springer Books, in: Pami Dua (ed.), Macroeconometric Methods, chapter 0, pages 123-148, Springer.
    2. Andrew Phiri, 2018. "Nonlinear Relationship between Exchange Rate Volatility and Economic Growth," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 61(3), pages 15-38.
    3. Muhammad Shahid Hassan & Amna Kausar & Noman Arshed, 2022. "Investigating Export Determinants: A Time Series Evidence From Canada," SAGE Open, , vol. 12(2), pages 21582440221, June.
    4. Sanjay Kumar Rout & Hrushikesh Mallick, 2020. "Transmission of International Financial Shocks: A Cross Country Analysis," Asian Development Policy Review, Asian Economic and Social Society, vol. 8(4), pages 236-259, December.
    5. Fourie, Justin & Pretorius, Theuns & Harvey, Rhett & Henrico, Van Niekerk & Phiri, Andrew, 2016. "Nonlinear relationship between exchange rate volatility and economic growth: A South African perspective," MPRA Paper 74671, University Library of Munich, Germany.
    6. Kamal P. Upadhyaya & Dharmendra Dhakal & Franklin G. Mixon, Jr., 2020. "Exchange Rate Volatility and Exports: Some New Estimates From the Asean-5," Journal of Developing Areas, Tennessee State University, College of Business, vol. 54(1), pages 65-73, January-M.
    7. Niloufer Sohrabji, 2024. "Asymmetric Exchange Rate Effects on Trade Flows in India," Economies, MDPI, vol. 12(5), pages 1-13, May.
    8. Saghir Pervaiz GHAURI & Hina QADIR & Rizwan Raheem AHMED & Dalia STREIMIKIENE & Justas STREIMIKIS, 2022. "The Exports Performance of Pakistan: Evidence from the ARDL Cointegration Analysis," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 150-168, December.
    9. Jyoti, 2021. "Impact of Exchange Rate Fluctuations on India’s Manufacturing Exports: An Empirical Investigation on Long-Run Relation," Journal of Asian Economic Integration, , vol. 3(1), pages 61-73, April.
    10. Upadhyaya, Kamal & Bhandari, Rabindra & Mixon, Franklin G. JR., 2020. "Exchange Rate Volatility and its Impact on China's Trade with the United States," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 73(3), pages 373-388.
    11. Abban, Stanley, 2020. "The Prospect of the Proposed Currency Union on Intra-regional Trade: Southern African Customs Union," MPRA Paper 103123, University Library of Munich, Germany.

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    More about this item

    Keywords

    Exchange rate volatility; Exports; India;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F3 - International Economics - - International Finance

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