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The Impacts of Financial Market, Trade and Economic Policy Uncertainties on the Import Performance of Advanced Economies

Author

Listed:
  • Gong, Xueting

    (Sichuan University of Public Administration, Chengdu, China)

  • Borojo, Dinkneh Gebre

    (Yiyang Vocational and Technical College, Yiyang, Hunan, China)

  • Yushi, Jiang

    (School of Economics and Management, Southwest Jiaotong University, Chengdu, China)

  • Miao, Miao

    (Chengdu Normal University, Chengdu, China)

  • Wu, eixuan

    (Sichuan Agricultural University, Chengdu, China)

Abstract

This study aims to examine the long-term and short-term diverse effects of economic policy uncertainty, trade policy uncertainty, and financial market uncertainties on the import performance of advanced economies. It employs the Pooled mean group autoregressive distributed lag (PMG/ARDL) method for the panel of 27 advanced economies using quarterly data from the first quarter of 1996 to the fourth quarter of 2020. The study's results reveal that local and global economic and trade policy uncertainties have significant adverse long-term effects on the import performance of advanced economies. Besides, financial market uncertainties negatively impact advanced economies’ imports in the long run. Nonetheless, the results imply that domestic economic and trade policy uncertainties positively affect imports in the short run. Moreover, the Dumitrescu-Hurlin (D-H) panel causality test indicated that bidirectional causality exists between financial market and trade policy uncertainty indicators and imports. However, unidirectional causality exists between economic policy indicators and imports. The results are consistent across different sensitivity analyses. Based on these findings, we propose policy implications to control economic, trade and financial market uncertainties and thereby alleviating their impact on the import performance of advanced economies.

Suggested Citation

  • Gong, Xueting & Borojo, Dinkneh Gebre & Yushi, Jiang & Miao, Miao & Wu, eixuan, 2024. "The Impacts of Financial Market, Trade and Economic Policy Uncertainties on the Import Performance of Advanced Economies," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 39(2), pages 394-419.
    • Handle: RePEc:ris:integr:0906
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    Keywords

    import performance; economic policy uncertainty; trade policy uncertainty; financial market uncertainty; advanced economies; heterogeneous panel models;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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