IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/81213.html
   My bibliography  Save this paper

Malaysia-Japan Commodity Trade and Asymmetric Effects of Exchange Rate Changes

Author

Listed:
  • BAHMANI-OSKOOEE, Mohsen
  • Aftab, Muhammad

Abstract

Asymmetry analysis is a new norm in applied research and the link between the trade balance and the exchange rate is no exception. In this paper we investigate the asymmetric response of the trade balance of each of the 60 industries that trade between Malaysia and Japan. We find short-run asymmetric effects of exchange rate changes on the trade balance of 50 industries (including the two largest industries), short-run adjustment asymmetry in 47 industry, and short-run impact asymmetry in 30 industries. However, short-run asymmetric effects lasted into the long run only in limited number of industries. Results were industry-specific at best.

Suggested Citation

  • BAHMANI-OSKOOEE, Mohsen & Aftab, Muhammad, 2017. "Malaysia-Japan Commodity Trade and Asymmetric Effects of Exchange Rate Changes," MPRA Paper 81213, University Library of Munich, Germany, revised 18 Aug 2017.
    • Handle: RePEc:pra:mprapa:81213
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/81213/1/MPRA_paper_81213.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Salah A. Nusair, 2017. "The J-Curve phenomenon in European transition economies: A nonlinear ARDL approach," International Review of Applied Economics, Taylor & Francis Journals, vol. 31(1), pages 1-27, January.
    2. Delatte, Anne-Laure & López-Villavicencio, Antonia, 2012. "Asymmetric exchange rate pass-through: Evidence from major countries," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 833-844.
    3. Nazif Durmaz, 2015. "Industry levelJ-curve in Turkey," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 42(4), pages 689-706, September.
    4. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    5. Jarita Duasa, 2007. "Determinants of Malaysian Trade Balance: An ARDL Bound Testing Approach," Global Economic Review, Taylor & Francis Journals, vol. 36(1), pages 89-102.
    6. Hamid Baghestani & Samer Kherfi, 2015. "An error-correction modeling of US consumer spending: are there asymmetries?," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 42(6), pages 1078-1094, November.
    7. Mohsen Bahmani‐Oskooee & Scott W. Hegerty, 2010. "The J‐ and S‐curves: a survey of the recent literature," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 37(6), pages 580-596, November.
    8. Bahmani-Oskooee, Mohsen, 1986. "Determinants of international trade flows : The Case of Developing Countries," Journal of Development Economics, Elsevier, vol. 20(1), pages 107-123.
    9. Arize, Augustine C. & Malindretos, John & Igwe, Emmanuel U., 2017. "Do exchange rate changes improve the trade balance: An asymmetric nonlinear cointegration approach," International Review of Economics & Finance, Elsevier, vol. 49(C), pages 313-326.
    10. Rose, Andrew K. & Yellen, Janet L., 1989. "Is there a J-curve?," Journal of Monetary Economics, Elsevier, vol. 24(1), pages 53-68, July.
    11. Florian Verheyen, 2013. "Interest rate pass-through in the EMU – new evidence using the nonlinear ARDL framework," Economics Bulletin, AccessEcon, vol. 33(1), pages 729-739.
    12. Luiz Lima & Claudio Foffano Vasconcelos & Jose Simão & Helder Ferreira de Mendonça, 2016. "The quantitative easing effect on the stock market of the USA, the UK and Japan," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 43(6), pages 1006-1021, November.
    13. Mohsen Bahmani-Oskooee & Hanafiah Harvey, 2017. "Bilateral Trade Balances of Malaysia with Her 11 Largest Trading Partners: New Evidence from Asymmetry Cointegration," Global Economic Review, Taylor & Francis Journals, vol. 46(2), pages 143-161, April.
    14. Mohammed Yusoff, 2007. "The Malaysian Real Trade Balance and the Real Exchange Rate," International Review of Applied Economics, Taylor & Francis Journals, vol. 21(5), pages 655-667.
    15. Matthieu Bussiere, 2013. "Exchange Rate Pass-through to Trade Prices: The Role of Nonlinearities and Asymmetries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(5), pages 731-758, October.
    16. Periklis Gogas & Ioannis Pragidis, 2015. "Are there asymmetries in fiscal policy shocks?," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 42(2), pages 303-321, May.
    17. Bahmani-Oskooee, Mohsen, 1985. "Devaluation and the J-Curve: Some Evidence from LDCs," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 500-504, August.
    18. Stephen P. Magee, 1973. "Currency Contracts, Pass-Through, and Devaluation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 4(1), pages 303-325.
    19. Lal, Anil K. & Lowinger, Thomas C., 2002. "The J-Curve: Evidence from East Asia," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 397-415.
    20. Andros Gregoriou, 2017. "Modelling non-linear behaviour of block price deviations when trades are executed outside the bid-ask quotes," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 44(2), pages 206-213, May.
    21. Pal, Debdatta & Mitra, Subrata K., 2016. "Asymmetric oil product pricing in India: Evidence from a multiple threshold nonlinear ARDL model," Economic Modelling, Elsevier, vol. 59(C), pages 314-328.
    22. Abdulrahman Al-Shayeb & Abdulnasser Hatemi-J, 2016. "Trade openness and economic development in the UAE: an asymmetric approach," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 43(4), pages 587-597, September.
    23. Mohsen Bahmani-Oskooee & Hadise Fariditavana, 2015. "Nonlinear ARDL approach, asymmetric effects and the J-curve," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 42(3), pages 519-530, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bahmani-Oskooee, Mohsen & Ardakani, Amid, 2020. "Does GINI respond to income volatility in an asymmetric manner? Evidence from 41 countries," Economic Systems, Elsevier, vol. 44(2).
    2. Khalfaoui, Rabeh & Padhan, Hemachandra & Tiwari, Aviral Kumar & Hammoudeh, Shawkat, 2020. "Understanding the time-frequency dynamics of money demand, oil prices and macroeconomic variables: The case of India," Resources Policy, Elsevier, vol. 68(C).
    3. Thorbecke, Willem & Sengonul, Ahmet, 2023. "The impact of exchange rates on Turkish imports and exports," International Economics, Elsevier, vol. 174(C), pages 231-249.
    4. Bao, Ho Hoang Gia & Le, Hoang Phong, 2021. "ASEAN's trade balance with the whole EU-28 at industry level: The role of vehicle currency," The Journal of Economic Asymmetries, Elsevier, vol. 24(C).
    5. Bilgin, Cevat, 2020. "Asymmetric Effects of Exchange Rate Changes on Exports: A Sectoral Nonlinear Cointegration Analysis for Turkey," MPRA Paper 101316, University Library of Munich, Germany.
    6. Bahmani-Oskooee, Mohsen & Aftab, Muhammad, 2022. "Who Has Benefitted from Malaysia-Pakistan Free Trade Agreement? An Industry Level Analysis," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 47(2), pages 20-38, June.
    7. Emmanuel Uche & Sunday Ikedinobi Nwamiri, 2022. "Dynamic Effects of Exchange Rate Movements on Productivity Levels: New Evidence From Nigeria Based on NARDL," Journal of Development Policy and Practice, , vol. 7(1), pages 96-111, January.
    8. Brun,Martin & Gambetta,Juan Pedro & Varela,Gonzalo J., 2020. "Slow Rockets and Fast Feathers or the Link between Exchange Rates and Exports : A Case Study for Pakistan," Policy Research Working Paper Series 9353, The World Bank.
    9. Tomader Elhassan, 2021. "Asymmetric Impact of Exchange Rate Fluctuations on Money Demand in Sudan," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(5), pages 406-417, May.
    10. Yixiao Jiang & George K. Zestos & Zachary Timmerman, 2020. "A Vector Error Correction Model for Japanese Real Exports," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 48(3), pages 297-311, September.
    11. Md. Golam Kibria & Ismay Jahan & Jannatul Mawa, 2021. "Asymmetric effect of financial development and energy consumption on environmental degradation in South Asia? New evidence from non-linear ARDL analysis," SN Business & Economics, Springer, vol. 1(4), pages 1-18, April.
    12. Trofimov, Ivan D., 2020. "Real Exchange Rate and the Dynamics of Services Trade Balance in the UK: A Linear and Non-linear ARDL Analysis," MPRA Paper 106703, University Library of Munich, Germany.
    13. Nathan Audu & Titus Obiezue, 2022. "Exchange Rate and Trade in Services Nexus in Nigeria: A Non-Linear ARDL Approach," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 8(1), pages 79-96, January.
    14. Sharaf, Mesbah Fathy & Shahen, Abdelhalem Mahmoud, 2023. "Asymmetric impact of real effective exchange rate changes on domestic output revisited: evidence from Egypt," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 7(1), pages 2-15.
    15. Md. Golam Kibria & M. M. K. Toufique, 2023. "Institutional governance and quality of life: evidence from developing countries," SN Business & Economics, Springer, vol. 3(3), pages 1-20, March.
    16. Trofimov, Ivan D., 2020. "Is There a J-Curve Effect in the Services Trade in Canada? A Panel Data Analysis," MPRA Paper 106704, University Library of Munich, Germany.
    17. Allan Kayongo & Asumani Guloba & Joseph Muvawala, 2020. "Asymmetric Effects of Exchange Rate on Monetary Policy in Emerging Countries: A Non-Linear ARDL Approach in Uganda," Applied Economics and Finance, Redfame publishing, vol. 7(5), pages 24-37, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bahmani-Oskooee, Mohsen & Aftab, Muhammad, 2018. "Asymmetric effects of exchange rate changes on the Malaysia-China commodity trade," Economic Systems, Elsevier, vol. 42(3), pages 470-486.
    2. Bahmani-Oskooee Mohsen & Harvey Hanafiah, 2017. "The Asymmetric Effects of Exchange Rate Changes on the Trade Balance of Singapore," Global Economy Journal, De Gruyter, vol. 17(4), pages 1-11, December.
    3. Mohsen Bahmani‐Oskooee & Hanafiah Harvey & Scott W. Hegerty, 2018. "The real peso–dollar rate and US–Mexico industry trade: an asymmetric analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 65(4), pages 350-389, September.
    4. Mohsen Bahmani-Oskooee & Huseyin Karamelikli, 2021. "The Turkey-US commodity trade and the asymmetric J-curve," Economic Change and Restructuring, Springer, vol. 54(4), pages 943-973, November.
    5. Mohsen Bahmani-Oskooee & Hanafiah Harvey & Amr Hosny, 2019. "Kazakhstan trade with its partners and the role of tenge: an asymmetric analysis," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 9(4), pages 493-513, December.
    6. Mohsen Bahmani-Oskooee & Muhammad Ali Nasir, 2020. "Asymmetric J-curve: evidence from industry trade between U.S. and U.K," Applied Economics, Taylor & Francis Journals, vol. 52(25), pages 2679-2693, May.
    7. Mohsen Bahmani-Oskooee & Hanafiah Harvey, 2018. "Do inpayments and outpayments respond to exchange rate changes asymmetrically: Evidence from Malaysia," The International Trade Journal, Taylor & Francis Journals, vol. 32(4), pages 317-342, August.
    8. Mohsen Bahmani-Oskooee & Huseyin Karamelikli, 2021. "Asymmetric J-curve: evidence from UK-German commodity trade," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(4), pages 1029-1081, November.
    9. Mohsen Bahmani-Oskooee & Niloy Bose & Yun Zhang, 2018. "Asymmetric Cointegration, Nonlinear ARDL, and the J-Curve: A Bilateral Analysis of China and Its 21 Trading Partners," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 54(13), pages 3131-3151, October.
    10. Mohsen Bahmani-Oskooee & Ridha Nouira, 2021. "U.S. – Italy commodity trade and the J-curve: new evidence from asymmetry analysis," International Economics and Economic Policy, Springer, vol. 18(1), pages 73-103, February.
    11. Bahmani-Oskooee, Mohsen & Nouira, Ridha, 2021. "U.S.-German commodity trade and the J-curve: New evidence from asymmetry analysis," Economic Systems, Elsevier, vol. 45(2).
    12. Mohsen Bahmani-Oskooee & Mir Obaidur Rahman & Mohammad Abdul Kashem, 2019. "Bangladesh’s trade partners and the J-curve: an asymmetry analysis," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 12(2), pages 174-189, May.
    13. Mohsen Bahmani-Oskooee & Augustine C. Arize, 2019. "The Sensitivity of U.S. Inpayments and Outpayments to Real Exchange Rate Changes: Asymmetric Evidence From Africa," International Economic Journal, Taylor & Francis Journals, vol. 33(3), pages 455-472, July.
    14. Mohsen Bahmani-Oskooee & Tatchawan Kanitpong, 2019. "Asymmetric Effects of Exchange Rate Changes on Thailand-China Commodity Trade: Evidence From 45 Industries," Chinese Economy, Taylor & Francis Journals, vol. 52(3), pages 203-231, May.
    15. Bahmani-Oskooee, Mohsen & Harvey, Hanafiah & Halicioglu, Ferda, 2021. "Does the real exchange rate play any role in the trade between Mexico and Canada? An asymmetric analysis," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 1-21.
    16. BAHMANI-OSKOOEE, Mohsen & Fariditavana, Hadiseh, 2016. "How Sensitive are the U.S. Inpayments and Outpayments to Exchange Rate Changes: An Asymmetry Analysis," MPRA Paper 81829, University Library of Munich, Germany, revised 06 Jan 2017.
    17. Mohsen Bahmani-Oskooee & Amirhossein Mohammadian, 2019. "Who benefits from euro depreciation in the euro zone?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(3), pages 577-595, August.
    18. Mohsen Bahmani‐Oskooee & Niloy Bose & Yun Zhang, 2019. "An asymmetric analysis of the J‐curve effect in the commodity trade between China and the US," The World Economy, Wiley Blackwell, vol. 42(10), pages 2854-2899, October.
    19. Mohsen Bahmani-Oskooee & Hadiseh Fariditavana, 2019. "How sensitive are the U.S. inpayments and outpayments to real exchange rate changes: an asymmetry analysis," International Economics and Economic Policy, Springer, vol. 16(4), pages 619-647, October.
    20. Mohsen Bahmani-Oskooee & Thouraya Hadj Amor & Hanafiah Harvey & Huseyin Karamelikli, 2019. "Is there a J-curve effect in Tunisia’s bilateral trade with her partners? New evidence from asymmetry analysis," Economic Change and Restructuring, Springer, vol. 52(1), pages 1-18, February.

    More about this item

    Keywords

    Nonlinear ARDL; Asymmetry; 60 Industries; Malaysia; Japan;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:81213. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.