The Impact of Exchange Rate Volatility on Indonesia’s Exports to the USA: An Application of ARDL Bounds Testing Procedure
Arief Bustaman and
No 200610, Working Papers in Economics and Development Studies (WoPEDS) from Department of Economics, Padjadjaran University
This paper investigates the long-run and short-run impacts of exchange rate volatility on Indonesia’s exports of priority commodities to the United States of America over the monthly period 1997-2005. Estimates of cointegration relations are obtained using ARDL bounds testing procedure. Estimates of the short-run dynamics are obtained using an error-correction model. The results show significant positive and negative coefficients among the range of commodities. However, in the long-run, majority of commodities tend to support the traditional view that higher exchange rate of volatility leads to higher cost and to less foreign trade. The net effect of exchange rate uncertainty on production and exports depends on the degree of relative risk aversion of the exporter of various commodities. This ultimately influences the reallocation of resources by participants.
Keywords: Exchange rate volatility; exports; ARDL bounds testing; error-correction model; Indonesia (search for similar items in EconPapers)
JEL-codes: C32 F14 F31 F41 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2006-12, Revised 2006-12
New Economics Papers: this item is included in nep-int and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
Published in International Journal of Applied BUsiness and Economic Research(IJABER) vol. 5(1)
Downloads: (external link)
http://ceds.feb.unpad.ac.id/wopeds/200610.pdf First version, 2006 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://ceds.feb.unpad.ac.id/wopeds/200610.pdf [301 Moved Permanently]--> https://ceds.feb.unpad.ac.id/wopeds/200610.pdf)
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:unp:wpaper:200610
Access Statistics for this paper
More papers in Working Papers in Economics and Development Studies (WoPEDS) from Department of Economics, Padjadjaran University Contact information at EDIRC.
Bibliographic data for series maintained by Arief Anshory Yusuf ().