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Exchange Rate Volatility and the Foreign Trade in CEEC

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  • Tomanova, Lucie

    (Silesian University in Opava/Finance, School of Business Administration in Karvina, Karvina, Czech Republic)

Abstract

The exchange rate plays an important role in a country’s export performance and currency volatility has impact on international trade, the balance of payments and economic performance, however, views on the impact of exchange rate volatility on international trade flows are inconsistent, thus it is necessary to examine this matter further, and with knowledge of the application to small open economies. This paper analyzes impact of exchange rate volatility on the export performance of Central and Eastern European countries. Using monthly time series data, the empirical analyses has been carried out for the period 01/1999 to 03/2013. Volatility’s impact on export performance is estimated on bilateral export flows of Czech Republic, Slovakia, Hungary and Poland to euro area. For the volatility measurement, G/ARCH models are used. Autoregressive distributed lag and error-correction approach are used to examine the impact of exchange rate volatility on the exports. The results suggest no significant relationship among the exchange rate volatility and export performance in CEE countries, impact of exchange rate volatility turns out to be ambiguous.

Suggested Citation

  • Tomanova, Lucie, 2013. "Exchange Rate Volatility and the Foreign Trade in CEEC," EY International Congress on Economics I (EYC2013), October 24-25, 2013, Ankara, Turkey 267, Ekonomik Yaklasim Association.
    • Handle: RePEc:eyd:cp2013:267
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    References listed on IDEAS

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    Cited by:

    1. Agnes Szunomar (ed.), 2014. "Chinese investments and financial engagement in Visegrad countries - Myth or reality?," Economic books, Institute for World Economics - Centre for Economic and Regional Studies, number 201411.

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    More about this item

    Keywords

    exchange rates; VECM; ARDL; export; volatility;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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