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Examining the Asymmetric Effects of Third-Country Exchange Rate Volatility on Pakistan–China Commodity Trade

Examining the Asymmetric Effects of Third-Country Exchange Rate Volatility on Pakistan–China... Keeping in view the idea of the third-country effect by Cushman, the analysis attempts to capture the asymmetric impact of third-country exchange rate volatility on Pakistan–China commodity trade. The empirical analysis is based on the annual data for 14 industries that export from Pakistan to China and 34 industries that import to Pakistan from China. The findings of the study confirm that nonlinear models generate more significant results both in the short and long runs. Moreover, the empirical findings suggest that the asymmetric assumption alone is not enough, and instead, we should use it along with the third economy effect. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of International Commerce, Economics and Policy World Scientific Publishing Company

Examining the Asymmetric Effects of Third-Country Exchange Rate Volatility on Pakistan–China Commodity Trade

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Publisher
World Scientific Publishing Company
ISSN
1793-9933
eISSN
1793-9941
DOI
10.1142/S1793993321500083
Publisher site
See Article on Publisher Site

Abstract

Keeping in view the idea of the third-country effect by Cushman, the analysis attempts to capture the asymmetric impact of third-country exchange rate volatility on Pakistan–China commodity trade. The empirical analysis is based on the annual data for 14 industries that export from Pakistan to China and 34 industries that import to Pakistan from China. The findings of the study confirm that nonlinear models generate more significant results both in the short and long runs. Moreover, the empirical findings suggest that the asymmetric assumption alone is not enough, and instead, we should use it along with the third economy effect.

Journal

Journal of International Commerce, Economics and PolicyWorld Scientific Publishing Company

Published: Jun 8, 2021

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