Long-Run Determinants of Japanese Import Flows from USA and China: A Sectoral Approach

Jacques Jaussaud and Serge Rey

Working papers of CATT from HAL

Abstract: We analyze the determinants of the sectoral Japanese imports from her two main partners, China and the USA over the period 1971-2007. We estimate cointegration relationships with breaks, using the Saikkonen-Lütkepohl method. For six sectors: foods, raw materials, textile, mineral fuel, chemicals and machinery and equipment, we show that if the domestic demand affects positively the imports, the impact of prices changes can be different whether we retain the relative prices (homogeneity hypothesis) or we consider both domestic and import, while when we decompose the relative prices between imports prices and domestic (corporate) prices, except in one case (textile imports from the USA), we can reject the homogeneity hypothesis. A possible explanation is the greater volatility of import prices compared to domestic prices which leads importers to wait when import prices change, insofar as they don't if these changes are temporary or permanent.

Keywords: Exchange rate; Yen; International Trade; Japan; Imports; Long-run relationships (search for similar items in EconPapers)
Date: 2009
Note: View the original document on HAL open archive server: https://univ-pau.hal.science/hal-01880360v1
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Citations: View citations in EconPapers (1)

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Working Paper: Long-Run Determinants of Japanese Import Flows from USA and China: A Sectoral Approach (2009)
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