Is the effect of exchange rate volatility on export diversification symmetric or asymmetric? Evidence from Ghana
Exchange rate volatility has been identified as one of the drivers of export diversification. Previous studies have assumed a symmetric relationship between the two variables. However, because volatility could be positive or negative and economic agents react to these changes differently, recent stu...
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Online Access: | http://dx.doi.org/10.1080/23322039.2018.1460027 |
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doaj-9f6f4b7c0dc04d3291ad54bbdce6a9802021-02-18T13:53:25ZengTaylor & Francis GroupCogent Economics & Finance2332-20392018-01-016110.1080/23322039.2018.14600271460027Is the effect of exchange rate volatility on export diversification symmetric or asymmetric? Evidence from GhanaCamara Kwasi Obeng0University of Cape CoastExchange rate volatility has been identified as one of the drivers of export diversification. Previous studies have assumed a symmetric relationship between the two variables. However, because volatility could be positive or negative and economic agents react to these changes differently, recent studies argue for the adoption of an asymmetric approach to the study of the relationship between the two variables. This study employed the partial sum process to create two variables to replace exchange rate volatility (Positive and negative variables) and utilized the Linear Autoregressive Distributed Lag (ARDL) and Nonlinear Autoregressive Distributed Lag (NARDL) techniques to investigate asymmetric effects of exchange rate volatility on export diversification in Ghana for the period 1983 to 2015. The results indicate that exchange rate volatility has asymmetric relationship with export diversification in Ghana. The study revealed that other drivers of export diversification in Ghana are income, investment, infrastructure, openness, and inflation. The paper recommends that the Central Bank should strengthen its efforts at stabilizing the exchange value of the cedi.http://dx.doi.org/10.1080/23322039.2018.1460027export diversificationsymmetricasymmetriclinear autoregressive distributed lagnonlinear autoregressive distributed lagghana |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Camara Kwasi Obeng |
spellingShingle |
Camara Kwasi Obeng Is the effect of exchange rate volatility on export diversification symmetric or asymmetric? Evidence from Ghana Cogent Economics & Finance export diversification symmetric asymmetric linear autoregressive distributed lag nonlinear autoregressive distributed lag ghana |
author_facet |
Camara Kwasi Obeng |
author_sort |
Camara Kwasi Obeng |
title |
Is the effect of exchange rate volatility on export diversification symmetric or asymmetric? Evidence from Ghana |
title_short |
Is the effect of exchange rate volatility on export diversification symmetric or asymmetric? Evidence from Ghana |
title_full |
Is the effect of exchange rate volatility on export diversification symmetric or asymmetric? Evidence from Ghana |
title_fullStr |
Is the effect of exchange rate volatility on export diversification symmetric or asymmetric? Evidence from Ghana |
title_full_unstemmed |
Is the effect of exchange rate volatility on export diversification symmetric or asymmetric? Evidence from Ghana |
title_sort |
is the effect of exchange rate volatility on export diversification symmetric or asymmetric? evidence from ghana |
publisher |
Taylor & Francis Group |
series |
Cogent Economics & Finance |
issn |
2332-2039 |
publishDate |
2018-01-01 |
description |
Exchange rate volatility has been identified as one of the drivers of export diversification. Previous studies have assumed a symmetric relationship between the two variables. However, because volatility could be positive or negative and economic agents react to these changes differently, recent studies argue for the adoption of an asymmetric approach to the study of the relationship between the two variables. This study employed the partial sum process to create two variables to replace exchange rate volatility (Positive and negative variables) and utilized the Linear Autoregressive Distributed Lag (ARDL) and Nonlinear Autoregressive Distributed Lag (NARDL) techniques to investigate asymmetric effects of exchange rate volatility on export diversification in Ghana for the period 1983 to 2015. The results indicate that exchange rate volatility has asymmetric relationship with export diversification in Ghana. The study revealed that other drivers of export diversification in Ghana are income, investment, infrastructure, openness, and inflation. The paper recommends that the Central Bank should strengthen its efforts at stabilizing the exchange value of the cedi. |
topic |
export diversification symmetric asymmetric linear autoregressive distributed lag nonlinear autoregressive distributed lag ghana |
url |
http://dx.doi.org/10.1080/23322039.2018.1460027 |
work_keys_str_mv |
AT camarakwasiobeng istheeffectofexchangeratevolatilityonexportdiversificationsymmetricorasymmetricevidencefromghana |
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