Impact of Exchange Rate Risks on Trade Flows: Does Regional Integration in Production Matter?

Nguyen Thi Thu Huong ()
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Nguyen Thi Thu Huong: Department of Foreign Trade Economics, Faculty of Economics, Vietnam Maritime University, Hai Phong City, Vietnam

Journal of International Commerce, Economics and Policy (JICEP), 2025, vol. 16, issue 02, 1-27

Abstract: This study examines the impact of exchange rate risks on international trade in the wake of regionalization. Applying panel regression with fixed effects models (FEMs) to a panel dataset covering 61 countries during 2007-2023, this study finds that exchange rate risks hamper multiple aspects of trade flows. Besides, this study discovers that ASEAN + 3 and RCEP regional integration in production can alleviate the negative impact of exchange rate risks on trade flows. These results suggest that strengthening regional cooperation and enhancing regional integration in production could be potential solutions for countries to overcome the adverse consequences of exchange rate risks.

Keywords: Exchange rate risks; regional integration; trade flows; RCEP; ASEAN3 (search for similar items in EconPapers)
JEL-codes: F14 F31 R58 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S1793993325500115

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