US–Thailand trade at the commodity level and the role of the real exchange rate

Previous studies that have investigated the impact of real depreciation of the Thai baht on Thailand's trade flows have either used aggregate trade data between Thailand and the rest of the world, or between Thailand and its major trading partners. These studies have provided mixed results. In this paper, we disaggregate the trade flows between Thailand and its major trading partner, the US, by commodity and investigate the impact of currency depreciation on the export earnings of 118 American exporting industries and the outpayments of 42 American importing industries. While most industries are affected in the short run, the short-run results last into the long run in several small industries. The inpayments of large exporting industries and the outpayments of large importing industries are not affected. Economic activity seems to be the major long-run determinant of the performance of most industries.     

Exchange‐Rate Risk and Japanese–Thai Industry Trade

Over the past decade, many papers have studied the effects of exchange‐rate volatility on international trade, particularly at the bilateral level for large numbers of individual industries. This is necessary because the underlying theory is ambiguous and because earlier papers failed to uncover significant results at a higher degree of aggregation. This paper examines the case of Japan and Thailand over the period from 1970 to 2010. We find that slightly more than half of 117 export industries and 54 import industries are affected by volatility in the short run. In the long run, 6 export and 2 import industries are affected positively, and 22 export and 9 import industries are affected negatively. Small Japanese export industries are more likely to be negatively affected, while imports show no differences regarding industry size. In a sectoral analysis, we find some evidence that Japanese exports of manufactures and certain machinery and transport equipment might be relatively more affected by the exchange‐rate risk. Raw material imports are least affected. These findings therefore suggest which industries might benefit most by a policy promoting a stable yen.     

The impact of exchange rate volatility on commodity trade between the US and Thailand

The impact of exchange rate volatility on trade flows continues to occupy the international finance literature. More recent studies have deviated from the traditional approach of using aggregate trade flows and have employed trade data at commodity level. This study investigates the impact of exchange rate uncertainty on the trade flows of 118 US exporting industries to Thailand and 41 US importing industries from Thailand. We find that exchange rate uncertainty has short-run effects on the trade flows of most industries. In the long-run, the main determinants of the trade flows are the level of economic activity in both countries.