Asymmetric effects of exchange rate changes on the Malaysia-China commodity trade
Mohsen Bahmani-Oskooee () and
MPRA Paper from University Library of Munich, Germany
Previous research that considered the response of the trade balance between Malaysia and China to exchange rate changes used a linear model and did not find any significant long-run link. Suspecting that the results suffer from aggregation bias as well as ignoring nonlinear adjustment of the exchange rate, we consider the trade balance of 59 industries that trade between the two countries and use a nonlinear ARDL model to show that almost 1/3rd of the industries are affected by ringgit depreciation against yuan, in an asymmetric manner. The largest industry which accounts for more than 25% of the trade is found to benefit from ringgit depreciation but not hurt from appreciation. In total, 15 industries that account for 40% of the trade enjoy this property.
Keywords: Nonlinear ARDL; Asymmetry; 65 Industries; Malaysia; China (search for similar items in EconPapers)
JEL-codes: F1 F3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna, nep-int and nep-sea
Date: 2017-02-13, Revised 2017-03-16
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/83024/1/MPRA_paper_83024.pdf original version (application/pdf)
Journal Article: Asymmetric effects of exchange rate changes on the Malaysia-China commodity trade (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:83024
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.
Bibliographic data for series maintained by Joachim Winter ().