The impacts of exchange rate volatility on vegetable trade flows

David Karemera, Shunsuke Managi, Lucy Reuben, Ora Spann

Research output: Contribution to journalArticle

10 Citations (Scopus)

Abstract

Trade flows of commodities are generally affected by the principles of comparative advantage in a free trade. However, trade flows might be enhanced or distorted not only by various government interventions, but also by exchange rate fluctuations among others. This study applies a commodity-specific gravity model to selected vegetable trade flows among Organization for Economic Co-operation and Development (OECD) countries to determine the effects of exchange rate uncertainty on the trade flows. Using the data from 1996 to 2002, the results show that, while the exchange rate uncertainty significantly reduces trade in the majority of commodity flows, there is evidence that both short- and long-term volatility have positive effect on trade flows of specific commodities. This study also tests the regional preferential trade agreements such as the North American Free Trade Agreement (NAFTA), the Asia-Pacific Economic Cooperation (APEC) and the EU, and their different effects on commodities.

Original languageEnglish
Pages (from-to)1607-1616
Number of pages10
JournalApplied Economics
Volume43
Issue number13
DOIs
Publication statusPublished - May 1 2011
Externally publishedYes

Fingerprint

Vegetables
Commodities
Trade flows
Exchange rate volatility
Exchange rate uncertainty
Economic cooperation
Co-development
Free trade agreements
Exchange rate fluctuations
Government intervention
Comparative advantage
Free trade
Asia-Pacific
Preferential trade agreements
Gravity model

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Cite this

The impacts of exchange rate volatility on vegetable trade flows. / Karemera, David; Managi, Shunsuke; Reuben, Lucy; Spann, Ora.

In: Applied Economics, Vol. 43, No. 13, 01.05.2011, p. 1607-1616.

Research output: Contribution to journalArticle

Karemera, David ; Managi, Shunsuke ; Reuben, Lucy ; Spann, Ora. / The impacts of exchange rate volatility on vegetable trade flows. In: Applied Economics. 2011 ; Vol. 43, No. 13. pp. 1607-1616.
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