White Rose University Consortium logo
University of Leeds logo University of Sheffield logo York University logo

Trade Flows, Exchange Rate Uncertainty and Financial Depth: Evidence from 28 Emerging Countries

Caglayan, M., Dahi, O.S. and Demir, F. (2010) Trade Flows, Exchange Rate Uncertainty and Financial Depth: Evidence from 28 Emerging Countries. Working Paper. Department of Economics, University of Sheffield ISSN 1749-8368

Full text available as:
[img] Text
SERPS201011.pdf

Download (301Kb)

Abstract

We investigate the effects of real exchange rate uncertainty and financial depth on manufactures exports from 28 emerging economies to the North and South over 1978-2005. We estimate a dynamic panel model using system GMM approach and show that for the majority of countries in our sample exchange rate uncertainty affects both South-South and South-North trade negatively. Furthermore, for several cases we discover that this effect is unidirectional, that is South-South or South-North. In addition, we find that while financial depth plays a trade-enhancing role, exchange rate shocks can negate this effect. We also show that trade among developing economies is likely to enhance export growth.

Item Type: Monograph (Working Paper)
Copyright, Publisher and Additional Information: The Sheffield Economics Research Paper (SERP) series offers a forum for the research output of the academic staff and research students of the Department of Economics, University of Sheffield. Papers are reviewed for quality and presentation by a departmental editor. However, the contents and opinions expressed remain the responsibility of the authors. All papers may be downloaded free on the understanding that the contents are preliminary and therefore permission from the author(s) should be sought before they are referenced.
Keywords: Trade flows; Exchange rate uncertainty; South-South trade; Financial depth; Dynamic panel data
Institution: The University of Sheffield
Academic Units: The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) > Sheffield Economics Research Papers Series
Depositing User: Repository Officer
Date Deposited: 07 Jun 2010 13:30
Last Modified: 05 Jun 2014 05:19
Published Version: http://www.shef.ac.uk/economics/research/serps/yea...
Status: Published
Publisher: Department of Economics, University of Sheffield
Identification Number: Sheffield Economic Research Paper Series 2010011
URI: http://eprints.whiterose.ac.uk/id/eprint/10860

Actions (login required)

View Item View Item