Malaysia-Japan Commodity Trade and Asymmetric Effects of Exchange Rate Changes

Asymmetry analysis is a new norm in applied research and the link between the trade balance and the exchange rate is no exception. In this paper we investigate the asymmetric response of the trade balance of each of the 60 industries that trade between Malaysia and Japan. We find short-run asymmetric effects of exchange rate changes on the trade balance of 50 industries (including the two largest industries), short-run adjustment asymmetry in 47 industries, and short-run impact asymmetry in 30 industries. However, short-run asymmetric effects lasted into the long run only in limited number of industries. Results are industry-specific at best.     

Accidents airline safety perceptions and consumer demand

This paper assesses the impact of perceptions about the safety level of airlines on enplanement. Consumer perceptions are specified with a Poisson distribution that updates over time. Using two different empirical specifications via a pooled generalized least squares procedure with fixed effects; we find no statistical evidence of a correlation between the perceived level of safety and enplanement. However, under an alternative specification in which the severity levels of accidents are ranked, we find that safety perceptions about accidents with minor injuries have no statistically significant impact on enplanement, while perceptions about accidents with serious injuries and fatalities lead to cumulative decreases in enplanement.     

The J-Curve: Evidence from commodity trade between Canada and the U.S.

Several studies in the literature have tried to assess the impact of real depreciation of the Canadian dollar on the Canadian trade balance. They have either relied on the trade data between Canada and the rest of the world or between Canada and her major trading partners. In this paper we consider the trade between Canada and her major trading partner, the U.S. However, unlike previous research, we disaggregate the trade data between the two countries by commodity. We use export and import data over the period 1962–2004 from 152 commodities and the bounds testing approach to cointegration and error-correction modeling and show that real depreciation of the Canadian dollar has short-run effects on the trade balance of two-thirds of the industries. However, only in 50% of the industries, the short-run effects translate into the long-run favorable effects.

Stock price and systematic risk effects of discontinuation of corporate R&D programs

We extend the evidence on whether investors impound efficiently into stock prices new disclosures about corporate R&D programs. We find that firms that disclose the discontinuation of some of their R&D programs experience a significant negative announcement-period stock price response which is worse for growth stocks, for small-size firms, and for firms with low operating cash flow. We find no evidence that R&D discontinuing firms experience an event-induced change in their systematic risk. We find evidence of a one-year-long price reversal; however, it is not robust to controlling for possible risk dimensions for firms with R&D capital that the three-factor model does not capture. Evidently, investors' initial response at disclosures of discontinuation of corporate R&D programs is efficient.     

Not for the Profit,But for the Training? Gender Differences in Training in the For-Profit and Non-Profit Sectors

In this article, we use Canadian-linked employer–employee data to examine gender differences in receiving firm-sponsored training. We find that women in the for-profit sector are less likely to receive classroom training and receive fewer classroom training courses. However, we find the opposite in the non-profit sector, where women are more likely to receive both classroom and on-the-job training, and also receive more classroom training courses. We show that women's worse training opportunities in the for-profit sector mainly operate within workplaces. We find no evidence that gender gaps in training in the for-profit sector are driven by lower probabilities of accepting training offers, child or family commitments, weaker labour market attachment or worker self-selection. We also find that gender differences in expected changes in wages and training opportunities between the two sectors can explain a large portion of women's higher probability of employment in the non-profit sector. Finally, decomposition results suggest that part of the gender wage gap in the for-profit sector, which is twice as large as in the non-profit sector, can be explained by gender differences in training.     

REAL INTEREST RATE PARITY AND FOURIER QUANTILE UNIT ROOT TEST

Real interest rate differentials usually exhibit two properties; structural breaks and asymmetric dynamics. In this paper, we use various types of Quantile Unit Root Test (QURT) which accounts for both properties. Unlike previous research, we reject the unit root in the real interest rate differentials in 18 out of 21 OECD countries as well as in 4 out of 5 BRICS countries using QURT with sharp and smooth breaks.     

A nonlinear approach to the U.S.–Australia commodity trade and the J‐curve: Evidence from 123 industries

The application of nonlinear models and asymmetric analysis have recently proven to yield results that are superior to those of the linear and symmetric analysis. However, the new approaches in testing the J‐curve between Australia and the rest of the world or between Australia and her trading partners such as the United States did not yield any significant outcomes. Suspecting that those results suffer from aggregation bias, we apply new methods to the trade flows of 123 industries that trade between the United States and Australia and give evidence of an asymmetric J‐curve in 28 industries. Furthermore, we find short‐run asymmetric effects of exchange rate changes on the trade balance of almost all studies, short‐run impact asymmetric effects in 27 industries and significant long‐run asymmetric effects in 56 industries. Our findings are industry‐specific.     

Revisiting purchasing power parity in Latin America: sequential panel selection method

This study applies the Sequential Panel Selection Method (SPSM), proposed by Chortareas and Kapetanios (2009) to test the validity of long-run purchasing power parity (PPP) in a sample of 15 Latin American countries using monthly data spanning from December 1994 to February 2010. SPSM classifies the whole panel into a group of stationary and nonstationary series. In doing so, we can clearly identify how many and which series in the panel are stationary processes. Empirical results from the SPSM using the Panel KSS unit root test (Ucar and Omay, 2009) with a Fourier function which accounts for any structural break in the data indicate that PPP holds in many of the Latin American countries studied.     

Exchange rate sensitivity of the demand for money in developing countries

There is consensus among researches that under the present floating exchange rate system although developing countries peg their exchange rate to a major currency, they cannot avoid fluctuation in their effective exchange rates as long as major currencies fluctuate against one another. Few authors have investigated the effects of changes in effective exchange rates of developing countries on their imports, exports, trade balance, demand for international reserves, inflation etc. In this paper we try to inestigate the effects of effective exchange rates of developing countries on their demand for money. Previous authors who have estimated a money demand function, inclusive of an exchange rate variable (bilateral or effective), have restricted themselves to industrial countries only. By using quarterly data over the 1973–85 period, it is shown that in most developing countries, while the short-run effcts of depreciation could be in either direction, its long-run effects are negative indicating that depreciation causes a decline in the demand for domestic currency.     

Regime changes and the impact of currency depreciations: the case of Spanish–US industry trade

Over the past half century, Western Europe has been part of varying currency regimes. Yet, whether under Bretton Woods, the European Monetary System, or the Euro, exchange-rate fluctuations have had an influence on these countries’ trade flows with the United States at the national and the industry level. This study looks at the case of Spain, examining the role of real exchange-rate fluctuations on trade with the United States for 74 industries. We find that the trade balances of only 40 industries are cointegrated with their macroeconomic determinants, but that 26 of these respond positively in the long run to a real depreciation. While industry characteristics do not seem to explain which industries are more likely to do this, we find that a relatively large share of industries in the Machinery sector see their trade balances improve after a depreciation.