The Impact of the Exchange Rate and Its Volatility on Output in Asia: The Role of Global Value Chains
- DOI
- 10.2991/apbec-18.2019.14How to use a DOI?
- Keywords
- Exchange rate; exchange rate volatility; global value chains; output; system generalized method moment
- Abstract
As a consequence of global value chains (GVCs), the exchange rate and its volatility becomes more important in influencing the output of a country. An interesting question has surfaced that concerns the alteration of exchange rate effects toward output in the GVC context. This study tries to fill the research gap from previous studies to include research that directly examines the impact of participation in GVCs on output in a region with similar exchange rate schemes. This study aims to investigate the relationship of the exchange rate and its volatility on output, and also explores the impact of GVC participation on output. We employ panel data that covers five countries in Asia, including Indonesia, Thailand, Japan, South Korea, and Malaysia, with annual data series through 1990-2015. The analytical method used in this study is the econometric approach with system generalized method of moment (SYS-GMM) approach. The result reveals that, first; the exchange rate volatility has a negative relationship to output; second, the exchange rate appreciation is found to increase output significantly; and third, an increase in GVC participation significantly leads to increased output. Therefore, the impact of exchange rate on output depends very much on the GVC pattern in respective country.
- Copyright
- © 2019, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Asia Miscolayati Hasanah AU - Telisa Aulia Falianty PY - 2019/07 DA - 2019/07 TI - The Impact of the Exchange Rate and Its Volatility on Output in Asia: The Role of Global Value Chains BT - Proceedings of the Asia Pacific Business and Economics Conference (APBEC 2018) PB - Atlantis Press SP - 94 EP - 102 SN - 2352-5428 UR - https://doi.org/10.2991/apbec-18.2019.14 DO - 10.2991/apbec-18.2019.14 ID - MiscolayatiHasanah2019/07 ER -