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The effect of foreign currency borrowing and financial development on exports: a dynamic panel analysis on Asia-Pacific countries

This paper examines the effect of foreign currency borrowing and financial development on exports. A balanced panel data is constructed for the selected 17 East Asian-Pacific countries, and the cointegration relationship among the variables of the export demand function is verified using Pedroni...

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Main Authors: Kin, Boon Tang, Tan, Hui Boon, Mohd Naseem, Niaz Ahmad
Format: Article
Language:English
Published: Routledge 2013
Online Access:http://psasir.upm.edu.my/id/eprint/30824/1/The%20effect%20of%20foreign%20currency%20borrowing%20and%20financial%20development%20on%20exports.pdf
http://psasir.upm.edu.my/id/eprint/30824/
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spelling my.upm.eprints.308242015-09-18T08:05:26Z http://psasir.upm.edu.my/id/eprint/30824/ The effect of foreign currency borrowing and financial development on exports: a dynamic panel analysis on Asia-Pacific countries Kin, Boon Tang Tan, Hui Boon Mohd Naseem, Niaz Ahmad This paper examines the effect of foreign currency borrowing and financial development on exports. A balanced panel data is constructed for the selected 17 East Asian-Pacific countries, and the cointegration relationship among the variables of the export demand function is verified using Pedroni's heterogeneous panel cointegration tests. The empirical results indicate that the effect of foreign debt on exports is conditional on the magnitude of currency depreciation. The larger the depreciation of a currency, the more its exports are adversely affected by its foreign liability. This finding might be a possible explanation as to why large exchange rate depreciation during the 1997 financial crisis failed to generate the export boom. The results also show different effects of financial shocks on exports in these economies. Routledge 2013 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/30824/1/The%20effect%20of%20foreign%20currency%20borrowing%20and%20financial%20development%20on%20exports.pdf Kin, Boon Tang and Tan, Hui Boon and Mohd Naseem, Niaz Ahmad (2013) The effect of foreign currency borrowing and financial development on exports: a dynamic panel analysis on Asia-Pacific countries. Journal of the Asia Pacific Economy, 18 (3). pp. 460-476. ISSN 1354-7860; ESSN: 1469-9648 10.1080/13547860.2012.742707
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description This paper examines the effect of foreign currency borrowing and financial development on exports. A balanced panel data is constructed for the selected 17 East Asian-Pacific countries, and the cointegration relationship among the variables of the export demand function is verified using Pedroni's heterogeneous panel cointegration tests. The empirical results indicate that the effect of foreign debt on exports is conditional on the magnitude of currency depreciation. The larger the depreciation of a currency, the more its exports are adversely affected by its foreign liability. This finding might be a possible explanation as to why large exchange rate depreciation during the 1997 financial crisis failed to generate the export boom. The results also show different effects of financial shocks on exports in these economies.
format Article
author Kin, Boon Tang
Tan, Hui Boon
Mohd Naseem, Niaz Ahmad
spellingShingle Kin, Boon Tang
Tan, Hui Boon
Mohd Naseem, Niaz Ahmad
The effect of foreign currency borrowing and financial development on exports: a dynamic panel analysis on Asia-Pacific countries
author_facet Kin, Boon Tang
Tan, Hui Boon
Mohd Naseem, Niaz Ahmad
author_sort Kin, Boon Tang
title The effect of foreign currency borrowing and financial development on exports: a dynamic panel analysis on Asia-Pacific countries
title_short The effect of foreign currency borrowing and financial development on exports: a dynamic panel analysis on Asia-Pacific countries
title_full The effect of foreign currency borrowing and financial development on exports: a dynamic panel analysis on Asia-Pacific countries
title_fullStr The effect of foreign currency borrowing and financial development on exports: a dynamic panel analysis on Asia-Pacific countries
title_full_unstemmed The effect of foreign currency borrowing and financial development on exports: a dynamic panel analysis on Asia-Pacific countries
title_sort effect of foreign currency borrowing and financial development on exports: a dynamic panel analysis on asia-pacific countries
publisher Routledge
publishDate 2013
url http://psasir.upm.edu.my/id/eprint/30824/1/The%20effect%20of%20foreign%20currency%20borrowing%20and%20financial%20development%20on%20exports.pdf
http://psasir.upm.edu.my/id/eprint/30824/
_version_ 1643830174833180672
score 13.211869

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