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An empirical investigation of asymmetric J-curve in the commodity trade between Pakistan and her four major trading partners1

Saba Naseem|Javed Iqbal|Misbah Nosheen|Mark Wohar
경제연구소 (Hanyang Economic Research Institute)|2022.11|Journal of Economic Research (JER)|제27권 제3호|pp. 191-234|DOI 10.17256/jer.2022.27.3.002

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Symmetric and Asymmetric J-CurveLinear and Non-linear ARDLCommodity Trade
주제분류경제학

초록

While previous studies have investigated the asymmetric behavior of the J-Curve effect using a Nonlinear ARDL methodology, our study employs disaggregated industry data to investigate this for the relation between Pakistan and US, China, and the UK. Our study contributes to the existing literature by estimating the J-curve phenomena between Pakistan and her four major trading partners; the US, China, the UK, and Japan at the industry level while allowing for asymmetry in the relationship between the exchange rate and the trade balance. The present study estimates both the linear and non-linear ARDL models for selected 22 industries in the USA, 09 industries in China, 27 industries in the UK, and 15 industries in Japan that trade with Pakistan. The empirical exercise shows that the industries having symmetric J-curve effect are 03 in the case of the US and Pakistan, 01 in the case of China and Pakistan, 04 in the case of the UK and Pakistan, and 04 in the case of Japan and Pakistan either considering the traditional definition or the advanced definition of the J-curve effect. According to the asymmetric approach to cointegration, the J-curve effect exists between Pakistan and the USA, China, the UK, and Japan in 11, 02, 09, and 04 industries respectively. The results show that asymmetry holds in the case of many industries. The study indicates the asymmetric

Abstract

While previous studies have investigated the asymmetric behavior of the J-Curve effect using a Nonlinear ARDL methodology, our study employs disaggregated industry data to investigate this for the relation between Pakistan and US, China, and the UK. Our study contributes to the existing literature by estimating the J-curve phenomena between Pakistan and her four major trading partners; the US, China, the UK, and Japan at the industry level while allowing for asymmetry in the relationship between the exchange rate and the trade balance. The present study estimates both the linear and non-linear ARDL models for selected 22 industries in the USA, 09 industries in China, 27 industries in the UK, and 15 industries in Japan that trade with Pakistan. The empirical exercise shows that the industries having symmetric J-curve effect are 03 in the case of the US and Pakistan, 01 in the case of China and Pakistan, 04 in the case of the UK and Pakistan, and 04 in the case of Japan and Pakistan either considering the traditional definition or the advanced definition of the J-curve effect. According to the asymmetric approach to cointegration, the J-curve effect exists between Pakistan and the USA, China, the UK, and Japan in 11, 02, 09, and 04 industries respectively. The results show that asymmetry holds in the case of many industries. The study indicates the asymmetric

참고문헌 (42)

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관련 논문AI추천

SHORT-RUN AND LONG-RUN EFFECTS OF CURRENCY DEPRECIATION ON THE BILATERAL TRADE BALANCE BETWEEN PAKISTAN AND HER MAJOR TRADING PARTNERSJEHANZEB CHEEMA, MOHSEN BAHMANI-OSKOOEE경제연구소 · Journal of Economic Development2009 · 제34권 제1호THE U.S. TRADE BALANCE WITH PARTNERS FROM DEVELOPING WORLD: AN ASYMMETRY ANALYSIS OF THE J-CURVE EFFECTHANAFIAH HARVEY, MOHSENBAHMANI-OSKOOEE경제연구소 · Journal of Economic Development2018 · 제43권 제2호Role of Exchange Rate on the UK-Germany Trade Balance: An Analysis at Industry Level우타이 우프라센EU연구소 · EU연구2018 · 제48호Role of Exchange Rate on Trade Balance and J-curve Effect between Thailand and Malaysia: An Industry Level AnalysisUTAI UPRASEN동남아연구소 · 동남아연구2018 · 제28권 제2호The Effect of Exchange Rate on Korea-Germany Trade Balance: An Industry Level Analysis황호선, UTAI UPRASEN한국세계지역학회 · 세계지역연구논총2017 · 제35권 제3호Türkiye’s services trade balance and the J-curve effectNazif Durmaz, Zikun Xu경제연구소 · Journal of Economic Research (JER)2025 · 제30권 제3호

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