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Exchange-rate volatility and commodity trade between the E.U. and Egypt: evidence from 59 industries

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  • Mohsen Bahmani-Oskooee
  • Scott Hegerty
  • Amr Hosny

Abstract

In recent years, the effects of exchange-rate risk on trade flows have been studied for numerous cases, with studies focusing on disaggregated, industry-level exports and imports for a pair of countries’ import and export volumes. This study examines the specific case of Egypt’s trade with the European Union, applying cointegration analysis to quarterly data for 59 industries’ export and import flows. We find that, compared to studies of other countries, relatively few trade flows respond to increased risk in the short run. In the long run, however, a large proportion responds negatively. These include the major industries of petroleum and gas. Further analysis suggests that non-manufactures are particularly susceptible to increased risk, particularly for Egyptian exports. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Mohsen Bahmani-Oskooee & Scott Hegerty & Amr Hosny, 2015. "Exchange-rate volatility and commodity trade between the E.U. and Egypt: evidence from 59 industries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(1), pages 109-129, February.
    • Handle: RePEc:kap:empiri:v:42:y:2015:i:1:p:109-129
    DOI: 10.1007/s10663-014-9250-6
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    References listed on IDEAS

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    17. Bahmani-Oskooee, Mohsen & Harvey, Hanafiah & Hegerty, Scott W., 2013. "The effects of exchange-rate volatility on commodity trade between the U.S. and Brazil," The North American Journal of Economics and Finance, Elsevier, vol. 25(C), pages 70-93.
    18. Paresh Kumar Narayan & Seema Narayan & Biman Chand Prasad & Arti Prasad, 2007. "Export‐led growth hypothesis: evidence from Papua New Guinea and Fiji," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 34(4), pages 341-351, September.
    19. Mohsen Bahmani‐Oskooee & Scott W. Hegerty, 2007. "Exchange rate volatility and trade flows: a review article," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 34(3), pages 211-255, August.
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    22. Mohsen Bahmani-Oskooee & Hanafiah Harvey & Scott W. Hegerty, 2012. "Exchange-Rate Volatility And Industry Trade Between The U.S. And Korea," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 37(1), pages 1-27, March.
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    Citations

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    Cited by:

    1. Osama M. Badr & Ahmed F. El-khadrawi, 2018. "Exchange Rate Volatility and Trade: An Empirical Investigation from the Egyptian Economy," Applied Economics and Finance, Redfame publishing, vol. 5(4), pages 140-149, July.
    2. repec:idn:journl:v:20:y:2017:i:1b:p:1-22 is not listed on IDEAS
    3. Unggul Heriqbaldi & Miguel Angel Esquivias & Rossanto Dwi Handoyo & Alfira Cahyaning Rifami & Hilda Rohmawati, 2022. "Exchange rate volatility and trade flows in Indonesia and ten main trade partners: asymmetric effects," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 40(4), pages 708-739, October.
    4. Nasir, Muhammad Ali & Vo, Xuan Vinh, 2020. "A quarter century of inflation targeting & structural change in exchange rate pass-through: Evidence from the first three movers," Structural Change and Economic Dynamics, Elsevier, vol. 54(C), pages 42-61.
    5. Pabai Fofanah, 2020. "Effects of Exchange Rate Volatility on Trade: Evidence from West Africa," Journal of Economics and Behavioral Studies, AMH International, vol. 12(3), pages 32-52.
    6. Muhammad Aftab & Karim Bux Shah Syed & Rubi Ahmad & Izlin Ismail, 2016. "Exchange-rate variability and industry trade flows between Malaysia and Japan," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(4), pages 453-478, June.
    7. 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.
    8. Bisharat Hussain Chang & Suresh Kumar Oad Rajput & Niaz Ahmed Bhutto, 2019. "Impact of Exchange Rate Volatility on the US Exports: A New Evidence From Multiple Threshold Nonlinear ARDL Model," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 10(02), pages 1-26, June.

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    More about this item

    Keywords

    Exchange rate volatility; Industry data; Egypt; European Union; Bounds testing; F31;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange

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