UK-China Trade and the J-Curve: Asymmetric Evidence from 68 Industries

Mohsen Bahmani-Oskooee and Huseyin Karamelikli

Chinese Economy, 2021, vol. 54, issue 3, 195-216

Abstract: Using monthly data over the period 2010M1-2018M12 we investigate the impact of the real yuna-pound rate on the trade balance of each of the 68 2-digit industries that trade between Britain and China. When a linear ARDL model was estimated, we found short-run symmetric effects in the trade balance of 45 industries that lasted into the long run only in 24 industries. Comparable numbers from the estimates of the nonlinear model were 64 and 39, respectively. The symmetric (asymmetric) J-curve effect received support in 17 (19) industries from the linear (nonlinear) model. Although the increase from the symmetric to asymmetric J-curve effect was not substantial, for the largest industry, i.e., industry coded 85 (Electrical machinery and equipment with 19.56% share of trade), while the symmetric J-curve was not supported, the asymmetric J-curve was. This highlights the significance of the nonlinear adjustment of the yuan-pound exchange rate.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/10971475.2020.1848470 (text/html)
Access to full text is restricted to subscribers.

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:mes:chinec:v:54:y:2021:i:3:p:195-216

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MCES20

DOI: 10.1080/10971475.2020.1848470

Access Statistics for this article

More articles in Chinese Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().