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Assessing the existence of the J-curve effect on trade in Malaysian forest products

This paper examines the dynamic effect of Malaysian exchange rate indices on bilateral trade for Malaysian forest products namely fibreboard, particle board and pulp for paper. Special attention is given to investigate the J-curve hypothesis: whether or not the trade balance for Malaysian forest pro...

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Main Authors: Abdul Samad, Abdul Rahim, Othman, Mohd Shahwahid
Format: Article
Language:English
Published: Faculty of Economics & Administration, University of Malaya and Malaysian Economic Association 2014
Online Access:http://psasir.upm.edu.my/id/eprint/36548/1/Assessing%20the%20existence2.pdf
http://psasir.upm.edu.my/id/eprint/36548/
http://mjes.um.edu.my/811-990
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spelling my.upm.eprints.365482016-11-01T05:06:46Z http://psasir.upm.edu.my/id/eprint/36548/ Assessing the existence of the J-curve effect on trade in Malaysian forest products Abdul Samad, Abdul Rahim Othman, Mohd Shahwahid This paper examines the dynamic effect of Malaysian exchange rate indices on bilateral trade for Malaysian forest products namely fibreboard, particle board and pulp for paper. Special attention is given to investigate the J-curve hypothesis: whether or not the trade balance for Malaysian forest products trade benefits from a decline in the value of the Ringgit Malaysia (RM). We adopt the autoregressive distributed lag (ARDL) approach to cointegration in estimating the annually bilateral trade data of Malaysian forest products trade with various countries in the world from 1970 to 2010. We find no evidence of the J-curve phenomenon for the Malaysian forest products trade. In the long run analysis, we found that Malaysian exchange rate is insignificant in influencing the Malaysian forest products trade balance. This implies that there are no changes in the trade balance for fibreboard, particle board and pulp for paper trade, regardless of whether the Malaysian exchange rate depreciates or appreciates. However, income variables are found to be important factors in determining the Malaysian trade only in pulp for paper product. Faculty of Economics & Administration, University of Malaya and Malaysian Economic Association 2014 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/36548/1/Assessing%20the%20existence2.pdf Abdul Samad, Abdul Rahim and Othman, Mohd Shahwahid (2014) Assessing the existence of the J-curve effect on trade in Malaysian forest products. Malaysian Journal of Economic Studies, 51 (2). pp. 141-150. ISSN 1511-4554 http://mjes.um.edu.my/811-990
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 dynamic effect of Malaysian exchange rate indices on bilateral trade for Malaysian forest products namely fibreboard, particle board and pulp for paper. Special attention is given to investigate the J-curve hypothesis: whether or not the trade balance for Malaysian forest products trade benefits from a decline in the value of the Ringgit Malaysia (RM). We adopt the autoregressive distributed lag (ARDL) approach to cointegration in estimating the annually bilateral trade data of Malaysian forest products trade with various countries in the world from 1970 to 2010. We find no evidence of the J-curve phenomenon for the Malaysian forest products trade. In the long run analysis, we found that Malaysian exchange rate is insignificant in influencing the Malaysian forest products trade balance. This implies that there are no changes in the trade balance for fibreboard, particle board and pulp for paper trade, regardless of whether the Malaysian exchange rate depreciates or appreciates. However, income variables are found to be important factors in determining the Malaysian trade only in pulp for paper product.
format Article
author Abdul Samad, Abdul Rahim
Othman, Mohd Shahwahid
spellingShingle Abdul Samad, Abdul Rahim
Othman, Mohd Shahwahid
Assessing the existence of the J-curve effect on trade in Malaysian forest products
author_facet Abdul Samad, Abdul Rahim
Othman, Mohd Shahwahid
author_sort Abdul Samad, Abdul Rahim
title Assessing the existence of the J-curve effect on trade in Malaysian forest products
title_short Assessing the existence of the J-curve effect on trade in Malaysian forest products
title_full Assessing the existence of the J-curve effect on trade in Malaysian forest products
title_fullStr Assessing the existence of the J-curve effect on trade in Malaysian forest products
title_full_unstemmed Assessing the existence of the J-curve effect on trade in Malaysian forest products
title_sort assessing the existence of the j-curve effect on trade in malaysian forest products
publisher Faculty of Economics & Administration, University of Malaya and Malaysian Economic Association
publishDate 2014
url http://psasir.upm.edu.my/id/eprint/36548/1/Assessing%20the%20existence2.pdf
http://psasir.upm.edu.my/id/eprint/36548/
http://mjes.um.edu.my/811-990
_version_ 1643831769163628544
score 13.211869

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