Exchange-rate volatility and sweden's trade with germany

Evidence from industry data

Mohsen Bahmani-Oskooee, Hanafiah Harvey, Scott W. Hegerty

Research output: Chapter in Book/Report/Conference proceedingChapter

3 Citations (Scopus)

Abstract

Previous literature studying countries' industry-level responses to exchange-rate volatility shows that only a fraction of trade flows are reduced by this risk. Significant increases have often been found for certain country pairs, and a lack of any discernable impact is even more prevalent. This study examines trade between Sweden and Germany, using annual data from 1979 to 2010 for 131 export and 150 import industries. Applying the "bounds testing" approach to cointegration, we find that a large majority of industries show no evidence of a long-run relationship between trade flows and their theoretical determinants. Of those that do, roughly half of export and import industries are affected in the long run by volatility, primarily negatively. Further industry-level analysis shows that while durable goods are no more or less likely to be significantly impacted by variability, Swedish imports show a pattern in which small industries are most affected. Large German exporters seem particularly insulated from these trade flows' theoretical determinants. JEL Classification: F31.

Original languageEnglish (US)
Title of host publicationNordic Countries: Economic, Political and Social Issues
PublisherNova Science Publishers, Inc.
Pages33-65
Number of pages33
ISBN (Print)9781619428737
StatePublished - 2012

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Sweden
industry
import
evidence
determinants
product life cycle
lack

All Science Journal Classification (ASJC) codes

  • Social Sciences(all)

Cite this

Bahmani-Oskooee, M., Harvey, H., & Hegerty, S. W. (2012). Exchange-rate volatility and sweden's trade with germany: Evidence from industry data. In Nordic Countries: Economic, Political and Social Issues (pp. 33-65). Nova Science Publishers, Inc..
Bahmani-Oskooee, Mohsen ; Harvey, Hanafiah ; Hegerty, Scott W. / Exchange-rate volatility and sweden's trade with germany : Evidence from industry data. Nordic Countries: Economic, Political and Social Issues. Nova Science Publishers, Inc., 2012. pp. 33-65
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Bahmani-Oskooee, M, Harvey, H & Hegerty, SW 2012, Exchange-rate volatility and sweden's trade with germany: Evidence from industry data. in Nordic Countries: Economic, Political and Social Issues. Nova Science Publishers, Inc., pp. 33-65.

Exchange-rate volatility and sweden's trade with germany : Evidence from industry data. / Bahmani-Oskooee, Mohsen; Harvey, Hanafiah; Hegerty, Scott W.

Nordic Countries: Economic, Political and Social Issues. Nova Science Publishers, Inc., 2012. p. 33-65.

Research output: Chapter in Book/Report/Conference proceedingChapter

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Bahmani-Oskooee M, Harvey H, Hegerty SW. Exchange-rate volatility and sweden's trade with germany: Evidence from industry data. In Nordic Countries: Economic, Political and Social Issues. Nova Science Publishers, Inc. 2012. p. 33-65