 Do the exchange rate fluctuations of trading partners affect the export competitiveness of a country? Malaysia as a case studyNurul Yaacob and Abul Masih MPRA Paper from University Library of Munich, Germany Abstract: This paper focuses on the following questions: (i))Is the export of Malaysia cointegrated with the exchange rates of her trading partners?(ii)Do the exchange rates of the trading partners have a significant impact on the competitiveness of Malaysia’s exports? (iii)Is there a need for Malaysia to cut her profit mark up to increase exports when her trading partners’ currency depreciated against Ringgit? Our findings tend to give the corresponding answers to the above three questions:(i) Yes, the export of Malaysia is cointegrated with the exchange rates of her trading partners (ii) No, Malaysia’s export is found to be the most exogenous variable in the model thus making Malaysia’s export variable impacting the exchange rates. (iii) No, based on our quantitative analysis, policy makers are suggested not to be very sensitive to the exchange rate fluctuations of its trading partners ,since the partners’ exchange rate changes may have no significant impact on her exports. The findings have strong policy implications for a developing country like Malaysia. Keywords: export performance; exchange rates of trading partners; VECM; VDC; Malaysia (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:108037 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
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