Productivity growth, fixed exchange rates, and export-led growth

Mao, Rui; Yao, Yang; Zou, Jingxian

doi:10.1016/j.chieco.2019.101311

Cited by 12 publications

(18 citation statements)

References 13 publications

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“…While output in the manufacturing sector is fairly elastic to change in the exchange rate in the long-run. This result is line with the study of Hunegnao (2017), and Mao, Yao and Zou (2019) that reported a positive relationship between exchange rate and output in the literature. However, the finding contradicts the study by Dhasmana (2015), and Viaene and Vries (1992).…”

Section: Source: Authors' Computation Using Eviews 10supporting

confidence: 93%

“…Furthermore, Dong, Ma and Wei (2020) show that the effect of exchange shock increase employment in China. Mao, Yao and Zou (2019) investigate the nexus among productivity growth, fixed exchange rate and export-led growth in China. The authors concluded that undervaluation promotes aggregate growth in the economy.…”

Section: Review Of Related Studiesmentioning

confidence: 99%

“…While empirical studies have emphasised that it depends on different factor such as degree of openness exposure and market power, characteristics and nature of the goods (Dhasmana, 2015;Funke & Raif, 2001;Aizenman & Pinto, 2005). Strand of the literature shows the implication on output is positively related (Mao, Yao & Zou, 2019;Hunegnaw, 2017), and negatively related (Aizenman & Pinto, 2005;Viaene & Vries, 1992) while others documented the implication on employment is positive (Dong, Ma & Wei, 2020;Chang, 2001), and negative (Campbell & Lusher, 2019;Dai & Xu, 2017;Demir, 2004). Generally, scholars have documented that the transmission of exchange rate influence the economy through the effect of the shock (Dong, Ma & Wei, 2020;Mao, Yao & Zou, 2019;Campbell & Lusher, 2019;Lee, 2018;Hammermesh, 1993), short and long-run effects (Alam et al, 2017;Shabahz et al, 2011;Hunegnaw, 2017).…”

Section: Introductionmentioning

confidence: 99%

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Real Exchange Rate and Manufacturing Performance in Nigeria

Asaleye

Maimako

Inegbedion

et al. 2021

Acad. J. Interdiscip. Stud.

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The efficacy of currency devaluation to improve output in Nigeria is under debate, and coupled with an unsatisfactory result in the behaviour of the manufacturing sector performance regenerated interest of this study to investigate the impact of exchange rate on output and employment in the sector. The work uses Structural Vector Autoregression, ECM and Canonical Co-integrating Regression to examine the shock effect, short and long-run elasticities of exchange rate on the manufacturing performance. While employment and output are used as a proxy for manufacturing sector performance. The findings show that changes in the exchange rate are fairly elastic with output and employment both in short and long-run. However, changes in the exchange rate are insignificant with employment in the short run. The variance decomposition form the SVAR shows that forecast error shock of the exchange rate is more prolong on employment than output. Consequently, the result of the estimation of the Impulse Response Function from the Monte Carlos shows that one standard deviation of the exchange shock adversely affect employment. The outcome of the result indicates that the Nigerian exchange rate has not improved output and employment in the manufacturing sector. Several factors may be accounted for this, although, it may be due to cost-push inflationary pressure and unfavourable competitiveness. The study suggests the need to encourage long-term supply-side policies among others to improve the situation. Received: 7 June 2020 / Accepted: 9 January 2021 / Published: 5 March 2021

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Section: Source: Authors' Computation Using Eviews 10supporting

confidence: 93%

Section: Review Of Related Studiesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Real Exchange Rate and Manufacturing Performance in Nigeria

Asaleye

Maimako

Inegbedion

et al. 2021

Acad. J. Interdiscip. Stud.

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“…Subsequently, the renminbi entered a managed floating regime, but exchange rate stability remained the fundamental goal. Fixed exchange rates helped drive China's exports significantly, accelerating industrialisation, but holding back workers' wages (Mao et al 2017). Other examples include the dual-track price system, SOE reform and industrial policies.…”

Section: The China Model Viewmentioning

confidence: 99%

The political economy causes of China’s economic success

Yao¹

2018

China’s 40 Years of Reform and Development: 1978–2018

Self Cite

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“…It is now well established that exchange rate policies represent an important tool for achieving many public policy objectives, including for example enhancing productivity growth (e.g., Fung, 2008), promoting countries' participation in international trade (e.g., Fung and Liu, 2009;Grobar, 1993;Mao et al, 2019;Nouira et al, 2011), achieving scal sustainability (e.g., Carrera and Vergara, 2012;Neaime, 2015), reducing poverty (e.g., Apergis, 2015;Apergis and Arusha, 2018;Diallo, 2007;Elbadawi, 2015), and more generally, in uencing countries' path of economic development through multiple channels (e.g., Guzman et al, 2018). As far as the poverty reduction effect of the real exchange rate is concerned, the few existing studies tend to suggest that the depreciation of the real exchange rate is conducive to poverty reduction.…”

Section: Introductionmentioning

confidence: 99%

Effect of Poverty on Real Exchange Rate in Developing Countries

Gnangnon¹

2020

Preprint

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A strand of the literature has shown that a depreciation of the real exchange rate contributes to poverty reduction. The current paper considers the issue in the other way around, by investigating whether poverty matters for the dynamics of real exchange rate. The analysis has been performed using a panel dataset of 106 countries over the period 1980-2017, and relied on the two-step system Generalized Methods of Moments (GMM). The findings are quite interesting. A rise in the level of poverty is associated with an appreciation of the real exchange rate over the full sample. However, countries with a high real per capita income experience a real exchange rate depreciation effect of poverty, while for countries with a relatively low real per capita income (such as poor countries), poverty is associated with an appreciation of the real exchange rate. Furthermore, poverty exerts an appreciation of the real exchange rate in countries with a low degree of trade openness (including trade policy liberalization), a low level of workers' productivity, and a high degree of export product concentration.

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Productivity growth, fixed exchange rates, and export-led growth

Cited by 12 publications

References 13 publications

Real Exchange Rate and Manufacturing Performance in Nigeria

Real Exchange Rate and Manufacturing Performance in Nigeria

The political economy causes of China’s economic success

Effect of Poverty on Real Exchange Rate in Developing Countries

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