How sensitive are Malaysia's bilateral trade flows to depreciation?

Abstract

In an attempt to assess the impact of currency depreciation on the trade balance, recent studies are employing disaggregated trade data to avoid aggregation bias. However, since import and export prices are not available at disaggregated level, recent studies are using export and import values rather than their volumes so that they can establish direct relation between inpayments and the exchange rate as well as between outpayments and the exchange rate. This study explores the experience of Malaysia. Bilateral inpayments and outpayments models are estimated between Malaysia and her 14 trading partners using quarterly data and bound testing approach to cointegration. The results show that while real depreciation of the ringgit has short-run effects, in the long-run it increases Malaysia's inpayments from only five trading partners.

Empirical Evidence on the J-Curve Between Pakistan and Selected South Asian Trade Partners

“…The same hypothesis have been tested by many scholars, such as [18], [16], [17], [12], [7] and found conflicting results. Among these studies, some of the scholars were used the aggregate data while the other ones analyzed the J-curve literature using the disaggregate data.…”

Do inpayments and outpayments respond to exchange rate changes asymmetrically: Evidence from Malaysia

“…By doing so researchers directly assess the effects of exchange rate changes on a country's inpayments from and outpayments to its trading partners. Haynes et al (1986), Bergstrand (1987), Cushman (1987), Bahmani-Oskooee and Goswami (2004), BahmaniOskooee et al (2005aBahmaniOskooee et al ( , 2005b, Bahmani-Oskooee and Harvey (2006) are some examples.…”

A taxa de câmbio e os ajustes no saldo da balança comercial brasileira: uma análise setorial da Curva J

“…Essa abordagem permite captar simultaneamente as dinâmicas de curto e longo prazos das variáveis analisadas. A literatura empírica internacional sugere tal abordagem ao estudo do referido fenômeno (Bahmani-Oskooee; Harvey, 2006;Kutan, 2009).…”

“…Rose e Yellen (1989) propõem um procedimento que consiste na identifi cação do referido fenômeno com base nas elasticidades de curto e longo prazos e que foi adotado nesta pesquisa. A evidência empírica internacional da Curva J foi confi rmada por vários pesquisadores em diferentes países e diferentes níveis de desagregação dos dados, por exemplo, por Gupta-Kappor e Ramakrishnan (1999), no Japão; Narayan (2004), na Nova Zelândia; Bahmani-Oskooee e Harvey (2006), na Malásia; Bahmani-Oskooee e Kutan (2009), na Bulgária; Shahbaz et al (2011Shahbaz et al ( , 2012, no Paquistão; Bahmani-Oskooee e Harvey (2012), em Cingapura, na Croácia e na Rússia; Kyophilavong, Shahbaz e Uddin (2013) No tocante ao Brasil, os resultados não parecem consensuais. Por um lado, Lobo (2007), Mendes e Piza (2007) e Vasconcelos (2010, utilizando dados agregados, não encontraram evidências de uma Curva J. Por outro lado, Pena et al (2011), além de Sonaglio, Scalco e Campos (2010), confi rmam a Curva J, também fazendo uso de dados desagregados.…”