Abenomics’ Trade Spillover

Benno Ferrarini
Additional contact information
Benno Ferrarini: Asian Development Bank

No 379, ADB Economics Working Paper Series from Asian Development Bank

Abstract: There is no escaping Japan’s competition in the world markets for goods, particularly in the automotive and electronics industries. Countries exporting to these markets are bound to feel the competitive pressure from a marked fall in the value of the yen. However, while some exporters will be hurt by a cheaper yen, others will benefit from lower input costs, to the extent that they source parts and components from Japan for processing, assembly, and reexport. This paper formalizes these intuitions and tests them against a data set covering more than 90% of world trade at the product level, between 2000 and 2011. Panel regression analysis shows that for countries and products facing Japan’s strongest competition, a 10% appreciation of the yen lowers average exports by more than 3%, which is a sizeable pass through. Elsewhere, the impact is negligible, particularly when vertical trade is accounted for.

Keywords: export competition; exchange rate spillover; Abenomics; Japan; Republic of Korea (search for similar items in EconPapers)
JEL-codes: F12 F13 F14 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2013-10-23
Note: http://www.adb.org/sites/default/files/pub/2013/ewp-379.pdf
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.adb.org/publications/abenomics-trade-spillover Full text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0379

Access Statistics for this paper

More papers in ADB Economics Working Paper Series from Asian Development Bank 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines. Contact information at EDIRC.
Bibliographic data for series maintained by Orlee Velarde ().