New empirical assessment of export price competitiveness: Industry-specific real effective exchange rates in Asia
Document Type
Journal Article
Publication Title
North American Journal of Economics and Finance
ISSN
10629408
Publisher
Elsevier
School
School of Business and Law
RAS ID
35308
Funders
Japan Society for the Promotion of Science
Abstract
© 2020 Elsevier Inc. This study constructed the industry-specific real effective exchange rate (I-REER) as a new measure of export competitiveness by industry. By aggregating I-REERs to a country-level I-REER for nine Asian economies, we assess the effect of REER appreciation on real exports by employing both static common-correlated effects (CCE) estimator and cross-sectionally augmented distributed lag (CS-DL) estimator (a dynamic version of the CCE estimator) to control for heterogeneity in the impact of unobservable common factors. The degree of REER's negative effect is found to have declined in recent years, which may imply that growing global value chains (GVCs) tend to mitigate the negative effect of REER appreciation on exports. As is well known that Asia is characterized as active regional trade and investment through GVCs, further regional integration would make Asian economies have less concern about policy coordination for regional exchange rate stability in Asia.
DOI
10.1016/j.najef.2020.101262
Access Rights
subscription content
Comments
Sato, K., Shimizu, J., Shrestha, N., & Zhang, S. (2020). New empirical assessment of export price competitiveness: Industry-specific real effective exchange rates in Asia. The North American Journal of Economics and Finance, 54, article 101262. https://doi.org/10.1016/j.najef.2020.101262