Economics at your fingertips  

The J-curve phenomenon in Afghanistan and its major trading partners: evidence from a non-linear ARDL approach

Mohammad Naim Azimi () and Mohammad Musa Shafiq
Additional contact information
Mohammad Naim Azimi: Kabul University
Mohammad Musa Shafiq: Kabul University

SN Business & Economics, 2022, vol. 2, issue 7, 1-28

Abstract: Abstract This study examines the J-curve hypothesis in Afghanistan (Afg) and its major trading partners, such as China (Chn), India (Ind), Iran (Irn), and Pakistan (Pak), using a set of well-known predictors to inform model specification. Using both linear and non-linear autoregressive distributed lags (ARDL) methods to test the symmetric and asymmetric effects of the J-curve phenomenon, the initial findings confirm a long-run symmetric nexus amid predictors. The results obtained from both the linear and non-linear ARDL estimates strongly support the J-curve effects in the Afg-Ind and Afg-Pak models, while they indicate otherwise for the Afg-Chn model. Further analysis reveals that the J-curve hypothesis symmetrically exists in the Afg-Irn model. Moreover, using the dynamic multiplier approach to delve into the asymmetric effects of the bilateral real exchange rate on the trade balance, the findings indicate that due to stylized facts, both positive and negative partial sum shocks from the bilateral real exchange rate are significant to retain the J-curve effects in the Afg-Pak model, while little evidence supports the significance of the J-curve for other three trading partners. Based on the findings, appropriate policy recommendations are discussed.

Keywords: J-curve; ARDL; Non-linear ARDL; Trade balance; Afghanistan (search for similar items in EconPapers)
JEL-codes: E10 F14 F44 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:

Ordering information: This journal article can be ordered from

DOI: 10.1007/s43546-022-00239-w

Access Statistics for this article

SN Business & Economics is currently edited by Gino D'Oca

More articles in SN Business & Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

Page updated 2022-07-09
Handle: RePEc:spr:snbeco:v:2:y:2022:i:7:d:10.1007_s43546-022-00239-w