Dynamic Elasticities of the Trade Balance of Brazilian Agriculture in Relation to the Exchange Rate

Azevedo, Dalylla Soares de; Arruda, Elano Ferreira; Brito, Antônio Clécio de; Castelar, Pablo Urano de Carvalho

doi:10.1080/08853908.2023.2165201

Cited by 5 publications

(4 citation statements)

References 20 publications

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“…Although commodities are not considered in the CTI, they play an important part in the added value and comparative advantage of low-tech industry. Similarly to the results obtained for the low-tech industry, Azevedo et al (2023) obtain a positive elasticity of Brazilian agricultural exports to the RER during practically all the studied period, using the same methodology. On an aggregate level, considering all the sectors, it could be said that the Marshall-Lerner condition is not valid, as it was not confirmed for high-tech, medium-high tech and medium-low tech industries, but, considering that these sectors account for less than half of Brazilian exports in the studied period, that might not be the best answer.…”

Section: Analysis Of the Resultssupporting

confidence: 71%

“…The trade balance indicator is derived from the natural logarithm of the ratio between Brazilian exports and imports, a common configuration for this variable in the empirical literature (Moura & da Silva, 2005;Sonaglio, Scalco, & Campos, 2010;Azevedo et al, 2023). This variable is constructed using data on exports and imports of high- In Table 1, the share of each CTI sector in Brazilian exports and imports is presented.…”

Section: Datasetmentioning

confidence: 99%

“…In Brazilian economic research, a significant disparity in results arises from the varying levels of aggregation employed. Older studies tend to favor an aggregated approach (Lobo, 2007;Mendes & Piza, 2007;Vasconcelos, 2010;Serdar & Hakan, 2017;Azevedo et al, 2023;Gomes & Paz, 2005;Parray et al, 2023). Conversely, some researchers choose to disaggregate the economy into sectors (Sonaglio, Scalco, & Campos, 2010;Arruda, Brito, & Castelar, 2022;Bahmani-Oskooee, Harvey, & Hegerty, 2014;Ramos Filho & Ferreira, 2016;Ribeiro, Vasconcelos, & Silva, 2021;Arruda & Martins, 2020), adopting various approaches ranging from analyzing isolated sectors like agriculture to segmenting the economy into numerous industries, which may result in complexity and confusion.…”

Section: Introductionmentioning

confidence: 99%

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Dynamic of Brazilian Foreign Trade by Technological Intensity

Machado Neto,

Arruda,

Brito

2024

IJEF

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This paper aims to investigate the long-run relationship between the real exchange rate and the Brazilian trade balance disaggregated by technological intensity classification, i.e., High Tech, Medium-High Tech, Medium Low Tech, and Low Tech, using monthly data from the period of January 2000 to December 2022. To achieve this aim, time-varying cointegration methodology is used, as it is understood that a linear approach is not well suited for developing economies, that face much influence from external events and internal turmoils, which is just the case of Brazil. It was found that, from the 4 sectors, only the low-tech sector has the usually expected signals, that is, a benefit from exchange depreciation, but even for this industry, this positive effect has been diminishing since 2009, due to structural changes in the Brazilian agricultural sector, which accounts for much of the added value in the low-tech goods. The dynamic real exchange rate elasticities for the medium-high and medium-low tech industries oscilated much throughout the time frame of the study, revealing the great influence of external and internal shocks in the change of the trajectory of these elasticities. The high-tech sector presented opposite signals in the estimated elasticities, revealing that exchange rate appreciations benefit it, probably due to its dependency on imported inputs.

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Section: Analysis Of the Resultssupporting

confidence: 71%

Section: Datasetmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Dynamic of Brazilian Foreign Trade by Technological Intensity

Machado Neto,

Arruda,

Brito

2024

IJEF

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“…AEX, AIM, and ATO constitute measures of TRADE. Anderson [36] , de Azevedo et al [37] , Djokoto [2,10,38,39] , Kastratović [40] , Narteh-Yoe, Djokoto and Pomeyie [41] and Osei, et al [33] measured trade similarly. The inflow of FDI into agriculture in developing countries is AIFDI, measured as the ratio of FDI to agricultural value added.…”

Section: Models and Datamentioning

confidence: 92%

Trade, Foreign Direct Investment and Agriculture in Developing Countries

Badu-Prah

Agyeiwaa-Afrane

Gidiglo

et al. 2023

Res. World Agric. Econ.

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Agriculture continues to make significant contributions to developing countries in the presence of globalisation. Thus, international trade and foreign capital flows are important to developing countries. The authors used data on 115 developing countries from 1995 to 2020 to investigate the effect of inward and outward foreign direct investment (FDI) on trade in the agricultural sector of developing countries. Inward FDI enhanced exports, imports, and trade openness. However, outward FDI did not affect exports, imports, and trade openness. To escalate international trade in agricultural products, developing countries must continue to promote the inflow of FDI into agriculture (AIFDI). This requires paying attention to appropriate management of the macroeconomy, keeping down the inflation rate, optimising the currency exchange rate, and keeping interest rates down to boost investment among others. Whilst these would enhance AIFDI that would promote trade, these would directly promote trade. As developing countries have often suffered foreign exchange pressures, they must enhance foreign exchange receipts through increased exports. Increasing human capital can increase exports. Unlike existing studies, the authors used more current data covering many developing countries and accounted for endogeneity.

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The impacts of exchange rate on US adjusted bilateral trade balance with Germany under Brexit: A comparative analysis

Ongan,

Gocer,

Karamelikli

2024

The Manchester School

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This study reveals the hidden dynamics of USA‐Germany international trade through a revised J‐curve hypothesis. It emphasizes the inadequacy of the traditional Bilateral Trade Balance (BTB) ratio based on total exports. To this aim, it introduces two new testing approaches based on adjusted BTB: the GDP‐driven‐BTB‐based J‐curve hypothesis (GDPJ) and the Non‐GDP‐driven‐BTB‐based J‐curve hypothesis (NGDPJ). The empirical findings advocate the necessity of these alternative tests, offering policymakers more informative results than the traditional approach. GDPJ is validated for 13 goods, while NGDPJ and traditional methods are validated for 10 and 8 goods. These results underscore the risks of solely relying on the traditional approach. By embracing the revised J‐curve hypothesis and alternative BTBs, policymakers can gain deeper insights into the USA‐Germany trade relationship. One interpretation is that, under Brexit, German consumers reduce their purchases of re‐exported goods more than domestically produced goods from the US.

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Dynamic Elasticities of the Trade Balance of Brazilian Agriculture in Relation to the Exchange Rate

Cited by 5 publications

References 20 publications

Dynamic of Brazilian Foreign Trade by Technological Intensity

Dynamic of Brazilian Foreign Trade by Technological Intensity

Trade, Foreign Direct Investment and Agriculture in Developing Countries

The impacts of exchange rate on US adjusted bilateral trade balance with Germany under Brexit: A comparative analysis

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