Exchange Rate Changes and Trade Flows in East Asia

Authors

  • Jerome Terhemba Andohol Benue State University, Makurdi
  • Victor Ushahemba Ijirshar Benue State University, Makurdi
  • Oluwafemi David Ogunjemilua University of Missouri, Columbia
  • Solomon Gbaka Benue State University, Makurdi

DOI:

https://doi.org/10.47743/saeb-2024-0007

Keywords:

asymmetry, East Asia, exchange rate, trade flows.

Abstract

This study investigates the impact of exchange rate changes on trade flows among East Asian countries spanning 1990–2021, using pooled mean group estimator, within the framework of panel data analysis. Findings indicate that world income, trade openness, and the real effective exchange rate strongly affect trade balance, and that the real depreciation of exchange rate exerts strong positive benefits on trade flows in the long run. The study also infers that trade openness and real effective exchange rate had strong influence on exports and imports for Hong Kong, Japan, and South Korea in the short run. However, the depreciation of their currencies discouraged imports in the long run. More so, world income strongly affects the exports and imports of Hong Kong and Japan, while trade openness is advantageous for all the countries. The study recommends the continuation of the prevailing trade-growth pattern, and the existing bilateral pegged exchange rate policy with their trading partners.

Author Biographies

Jerome Terhemba Andohol, Benue State University, Makurdi

Department of Economics

Victor Ushahemba Ijirshar, Benue State University, Makurdi

Department of Economics

Oluwafemi David Ogunjemilua, University of Missouri, Columbia

Department of Economics

Solomon Gbaka, Benue State University, Makurdi

Department of Economics

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Published

2024-03-05

How to Cite

Andohol, J. T. ., Ijirshar, V. U., Ogunjemilua, O. D., & Gbaka, S. . (2024). Exchange Rate Changes and Trade Flows in East Asia. Scientific Annals of Economics and Business, 71(1), 129–153. https://doi.org/10.47743/saeb-2024-0007

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