 THE EFFECTS OF EXCHANGE RATE VOLATILITY ON SOUTH AFRICA’S TRADE WITH THE EUROPEAN UNIONE. M. Ekanayake, Ranjini L. Thaver and Daniel Plante The International Journal of Business and Finance Research, 2012, vol. 6, issue 3, 13-26 Abstract: In this paper we analyze the effects of the real exchange rate volatility on South Africa’s trade flows with the European Union over the period 1980 to 2009. Our study uses quarterly trade flows on South Africa’s exports and imports and utilizes the bounds testing approach to cointegration, and error-correction model. Our results reveal that imports depend positively on the levels of domestic economic activity and foreign exchange reserves but negatively on relative prices and exchange rate volatility. In addition, exports depend positively on the levels of foreign economic activity but negatively on relative prices and exchange rate volatility. Furthermore, the exchange volatility exerts mixed effects in the short-run and in the long-run. Keywords: South Africa; imports; exports; exchange rate volatility; panel cointegration (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ibf:ijbfre:v:6:y:2012:i:3:p:13-26 Access Statistics for this article The International Journal of Business and Finance Research is currently edited by Terrance Jalbert More articles in The International Journal of Business and Finance Research from The Institute for Business and Finance Research |
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