Exchange rate volatility and Pakistan’s exports to major markets: a sectoral analysis

Author Affiliation

Qazi Masood Ahmed is Professor & Director CBER at Institute of Business Administration (IBA), Karachi

Faculty / School

Faculty of Business Administration (FBA)

Department

Department of Economics

Was this content written or created while at IBA?

Yes

Document Type

Article

Source Publication

Global Business Review

ISSN

0973-0664

Disciplines

Accounting | Business | Business Administration, Management, and Operations

Abstract

The present study investigated the impact of exchange rate volatility on Pakistan’s bilateral sectoral exports with its major trading partners, that is, USA, UK, Japan, Germany and Saudi Arabia. We have employed the multivariate co-integration test and found the presence of a long-run relationship amid the variables. The empirical evidence indicates that exchange rate volatility has consistent and favourable effect on sectoral exports of Pakistan in most of the cases. These sectoral exports’ results are considerably different from the results of aggregate and bilateral exports as the long-run elasticities for exchange rate volatility, regarding sectoral exports across countries, are all greater in magnitude as compared to aggregate and bilateral elasticities of exchange rate volatility, and some signs are also opposite (Alam & Ahmed, 2012). This concludes that the aggregate and bilateral aggregate exports data may weaken the effects of exchange rate volatility to statistically insignificant or less significant, and that the effect of exchange rate volatility may probably be more responsive to the nature of industry producing exportable goods.

Indexing Information

HJRS - X Category, Scopus, Web of Science - Emerging Sources Citation Index (ESCI)

Publication Status

Published

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