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1 – 3 of 3Mohsen Bahmani-Oskooee and Huseyin Karamelikli
The purpose of this paper is to show that in some industries the linear model may not reveal any significance link between exchange rate volatility and trade flows but once…
Abstract
Purpose
The purpose of this paper is to show that in some industries the linear model may not reveal any significance link between exchange rate volatility and trade flows but once nonlinear adjustment of exchange rate volatility is introduced, the nonlinear model reveals significant link.
Design/methodology/approach
This paper uses the linear ARDL approach of Pesaran et al. (2001) and the nonlinear ARDL approach of Shin et al. (2014) to assess asymmetric effects of exchange rate volatility on trade flows between Germany and Turkey.
Findings
This paper consider the experiences of 75 2-digit industries that trade between Turkey and Germany. When the study assumed the effects of volatility to be symmetric, the study found short-run effects in 31 (30) Turkish (German) exporting industries that lasted into the long run in only 10 (13) Turkish (German) exporting industries. However, when the study assumed asymmetric effects and relied upon a nonlinear model, the study found short-run asymmetric effects of volatility on exports of 55 (56) Turkish (German) industries. Short-run asymmetric effects lasted into long-run asymmetric effects in 10 (25) Turkish (German) exporting industries. All in all, we found that almost 25% of trade is hurt by exchange rate volatility.
Originality/value
This is the first paper that assesses the possibility of asymmetric effects of exchange rate volatility on German–Turkish commodity trade.
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Keywords
Past research suggests that a financial crisis event has a dual and ambiguous effect on the exporting strategy of subsidiaries of multinational firms in a value chain and…
Abstract
Past research suggests that a financial crisis event has a dual and ambiguous effect on the exporting strategy of subsidiaries of multinational firms in a value chain and offshoring perspective. From a total volume perspective exports are expected to contract due to a decline in demand (demand shock) from other subsidiaries downstream in the value chain. While in a comparative perspective multinational subsidiaries are found to perform relatively better than local firms that are integrated differently (arms’ length) in global production networks (e.g., offshoring outsourcing). This chapter tries to reconcile these findings by testing a number of hypothesis about global integration strategies in the context of the Global Financial Crisis (GFC) and how it affected exporting among multinational subsidiaries operating out of Turkey. Controlling for the impact that exchange rate depreciations and volatility has on firm-level exports the study shows that the particular global event studied had no additional impact on individual firms’ exports. Since multinational subsidiaries are more insulated from these effects they are able to expand rather than contract their global integration strategies throughout the course of the GFC.
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Gustavo Barboza, Laura Gavinelli, Valerien Pede, Alice Mazzucchelli and Angelo Di Gregorio
The purpose is to detect the nonlinearity wholesale rice price formation process in Italy in the 1995–2017 period.
Abstract
Purpose
The purpose is to detect the nonlinearity wholesale rice price formation process in Italy in the 1995–2017 period.
Design/methodology/approach
A nonlinear smooth transition autoregressive (STAR)-type dynamics model is used.
Findings
Wholesale rice prices are significantly affected by variations in the international price of rice as well as variations in Arborio price.
Research limitations/implications
The limitations include policy recommendations for the production and commercialization of rice in Italy.
Practical implications
Understanding rice pricing dynamics and nonlinearity behavior is pivotal for the survival of the entire European and Italian rice supply chain.
Originality/value
In the extant literature, no evidence exists on non-linearity of rice prices in Italy.
Details