 Dynamic Perspective of Trade Balance: Evidence from Southeast Asia before the Global Financial Crisis of 2008GATR Journals from Global Academy of Training and Research (GATR) Enterprise Abstract: Objective � This paper studies the influence of some determinants of trade balance for Southeast Asia countries in dynamics perspective before the global financial crisis of 2008. Methodology/Technique � Based on quarterly data (1980q1 to 2007q3), the investigation is carried out using VECM. Findings � The results show that in the long run: (i) income effect is found to be dominant in determining the change in trade balance; (ii) the cash balance effect does influence bilateral trade; (iii) bilateral trade is affected by exchange rate movements. Further, the effect of small economies are suspected to be present in Southeast Asia region. Meanwhile, in the short run: (i) the cash balance effect plays a major role in influencing trade balance improvement; (ii) compared to the cash balance effect, the income effect is present with slightly less contribution; (iii) the exchange rate effect is observed in the analysis, while a J-curve phenomenon exists in minor cases. Novelty � This paper concludes that in the long term, income effect is found to be dominant in determining the change in trade balance. Type of Paper: Empirical JEL-codes: C33 F14 O14 (search for similar items in EconPapers) Published in Journal of Business and Economics Review, Volume 4, Issue 1 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:gtr:gatrjs:jber170 Access Statistics for this paper More papers in GATR Journals from Global Academy of Training and Research (GATR) Enterprise |
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