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Foreign Trade Behavior in Thailand: Stable or Unstable?

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  • A. C. Arize
  • P. Chooekawong
  • V. Prasanpanich

Abstract

This paper analyzes the demand for import and export functions of Thailand. It provides new evidence on both cointegration and the stability of the long-run relationship between trade flows and their determinants. Cointegration analyses are based on the Johansen (1992, 1995) system approach and the FM-OLS by Phillips and Hansen (1990) technique. Evidence of stability is examined using two formal tests of the cointegration space by Hansen and Johansen (1993) and Hansen (1992). The major results show that there is a long-run equilibrium relationship between trade flows and their determinants. While the import demand function appears structurally stable, there is evidence of parameter instability in the export demand function.

Suggested Citation

  • A. C. Arize & P. Chooekawong & V. Prasanpanich, 2000. "Foreign Trade Behavior in Thailand: Stable or Unstable?," The American Economist, Sage Publications, vol. 44(2), pages 36-45, October.
    • Handle: RePEc:sae:amerec:v:44:y:2000:i:2:p:36-45
    DOI: 10.1177/056943450004400204
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    References listed on IDEAS

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    4. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
    5. Dipendra Sinha, 1997. "Determinants of Import Demand in Thailand," International Economic Journal, Taylor & Francis Journals, vol. 11(4), pages 73-873.
    6. Kremers, Jeroen J M & Ericsson, Neil R & Dolado, Juan J, 1992. "The Power of Cointegration Tests," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 325-348, August.
    7. Hendry, David F & Doornik, Jurgen A, 1994. "Modelling Linear Dynamic Econometric Systems," Scottish Journal of Political Economy, Scottish Economic Society, vol. 41(1), pages 1-33, February.
    8. Nelson, Charles R. & Plosser, Charles I., 1982. "Trends and random walks in macroeconmic time series : Some evidence and implications," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 139-162.
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    Cited by:

    1. Il-Hyun Yoon & H. R. Seddighi, 2019. "Demand for Imports and Components of Final Expenditure An Empirical Study with Special Reference to the Korean Import Demand Function," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 6(1), pages 52-58.
    2. M. Adetunji Babatunde & Festus O. Egwaikhide, 2010. "Explaining Nigeria's import demand behaviour: a bound testing approach," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 9(2), pages 167-187, July.

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