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S-curve at the industry level: evidence from Malaysia's bilateral trade with its major trading partners in East Asia

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  • Abdorreza Soleymani
  • Soo Y. Chua

Abstract

This study investigates the relationship between the terms of trade and trade balance for Malaysia with its three major trading partners namely China, Japan and Singapore using the S-curve. The lead and lag cross-correlations between the terms of trade and the trade balance resemble a horizontal S-curve. We evaluate the S-curve in 70 industries over the period 1974-2009. Initial results with aggregated bilateral trade data did not show any S-curve pattern. However, by using the industry level data, we found the existence of the S-curve pattern in some of these industries. Most of these are small and intermediate goods industries. Finally, our findings support that durables are more sensitive to real exchange rate changes than non-durables only in the case of China.

Suggested Citation

  • Abdorreza Soleymani & Soo Y. Chua, 2013. "S-curve at the industry level: evidence from Malaysia's bilateral trade with its major trading partners in East Asia," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 20(3), pages 252-269, September.
    • Handle: RePEc:taf:raaexx:v:20:y:2013:i:3:p:252-269
    DOI: 10.1080/16081625.2013.791032
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    References listed on IDEAS

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    1. Haddad, Mona, 2007. "Trade integration in East Asia : the Role of China and production networks," Policy Research Working Paper Series 4160, The World Bank.
    2. Masahisa Fujita & Nobuaki Hamaguchi, 2012. "Japan and economic integration in East Asia: post-disaster scenario," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(2), pages 485-500, April.
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    Cited by:

    1. Abdorreza Soleymani & Soo Y. Chua & Hamat Che Abdul Fatah, 2016. "The Effects of Currency Depreciation on Industry Trade Flows between Malaysia and China," The International Trade Journal, Taylor & Francis Journals, vol. 30(3), pages 181-206, May.

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