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Textile Producer Cotton Imports and the Exchange Rate

Author

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  • Durmaz, Nazif
  • Thompson, Henry

Abstract

This paper estimates exchange rate sensitivity of US cotton imports for three textile producers with floating or regularly adjusting exchange rates since the 1970s, Bangladesh, Indonesia, and Thailand. The cotton import market model includes mill use, US production cost, and an alternate supply. Empirical analysis examines effects of the Asian financial crisis. Exchange rate behavior and sensitivity varies across the three importers. Aggregation hides information on market reaction. Changes in the rate of depreciation have stronger effects than changes in the level of the exchange rate.

Suggested Citation

  • Durmaz, Nazif & Thompson, Henry, 2010. "Textile Producer Cotton Imports and the Exchange Rate," MPRA Paper 21831, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:21831
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    File URL: https://mpra.ub.uni-muenchen.de/23778/1/MPRA_paper_23778.pdf
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    References listed on IDEAS

    as
    1. Roe, Terry L. & Shane, Mathew & Somwaru, Agapi, 2006. "Exchange Rates, Foreign Income and U.S. Agriculture," Bulletins 12975, University of Minnesota, Economic Development Center.
    2. Thompson, Henry & Upadhyaya, Kamal P., 1998. "The Impact of the Exchange Rate on Local Industry," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 51(1), pages 101-113.
    3. Almarwani, Abdul & Jolly, Curtis M. & Thompson, Henry, 2007. "Exchange Rates and Commodity Markets: Global Exports of Corn, Cotton, Poultry, and Soybeans," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 8(01), pages 1-10, January.
    4. Bayard, Budry & Chen, Lijun & Thompson, Henry, 2009. "Free Trade and a Case of Local Tomato Production," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 8(2).
    5. G. Edward Schuh, 1974. "The Exchange Rate and U. S. Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(1), pages 1-13.
    6. Titus O. Awokuse & Yan Yuan, 2006. "The impact of exchange rate volatility on U.S. poultry exports," Agribusiness, John Wiley & Sons, Ltd., vol. 22(2), pages 233-245.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Cotton imports; exchange rates;

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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