The S-Curve： China versus Its Major Trading Partners

China has been accused of manipulating its currency to gain international competitiveness and enjoy a trade surplus. The S-Curve is a hypothesis that could be used to test the depreciation. It claims that while future effectiveness of currency devaluation or values of the trade balance and current exchange rate are positively correlated, the past values of the trade balance and current exchange rate are negatively correlated. While China＇s aggregate trade flows with the rest of the world conforms to the S-Curve hypothesis, disaggregating trade flows by trading partner reveals that not all partners are affected equally by devaluation. Indeed, trade with 8 out of the 24 partners does not support the S-Curve hypothesis.     

S-curve dynamics of trade between Sweden and her trading partners

The S-curve sums up the dynamic relationship between terms of trade and trade balance. This pattern has received weak support in some developed and less developed countries when aggregate trade data are used. Empirical regularities based on aggregate trade data can be biased since aggregation can potentially suppress some of the patterns observed in trade at the bilateral level. This paper overcomes this problem by employing bilateral trade data from Sweden and finds that the S-curve is invariant to this level of disaggregation. Indeed, Sweden has a bilateral S-curve with 12 out of 17 cases examined for the 1980Q1–2005Q1 period.     

Real and Nominal Effective Exchange Rates for LDCs: 1971–2004

International Monetary Fund constructs and publishes real and nominal effective exchange rates mostly for industrial countries. Recently it has begun publishing such data for some newly industrialized developing countries as well. There remains some developing countries that still have not received any attention by the IMF. This paper bridges that gap by constructing quarterly real and nominal effective exchange rates for 11 developing countries over the 1971–2004 period. As an application we try to assess whether nominal depreciation in these countries has led to real depreciation.     

THE EFFECT OF CROSS‐LISTING ON TRADING VOLUME: REDUCING SEGMENTATION VERSUS SIGNALING INVESTOR PROTECTION

We examine the relation between cross‐listing on the U.S. and UK regulated and unregulated exchanges and trading volume for a sample of 500 foreign firms from 34 countries. We find that the increase in trading volume is a function of both reducing segmentation and signaling investor protection. In addition, we find that home market trading volume, firm size, firm returns, and analyst forecast accuracy are the major determinants of a firm's trading volume. We also show that U.S. and UK investors trade foreign securities that originate from low‐investor‐protection countries more than they trade those from high‐investor‐protection countries, which is consistent with the bonding hypothesis.     

An integrated vendor–buyer model with stock-dependent demand

We develop an integrated vendor–buyer model for a two-stage supply chain. The vendor manufactures the product and delivers it in a number of equal-sized batches to the buyer. The items delivered are presented to the end customers in a display area. Demand is assumed to be positively dependent on the amount of items displayed. The objective is to maximize total supply chain profit. The numerical analysis shows that buyer–vendor coordination is more profitable in situations when demand is more stock dependent. It also shows that the effect of double marginalization provides a link between the non-coordinated and the coordinated case.     

Immigrants and Workplace Training: Evidence from Canadian Linked Employer–Employee Data

Job training is one of the most important aspects of skill formation and human capital accumulation. In this study, we use longitudinal Canadian linked employer–employee data to examine whether white/visible minority immigrants and Canadian-born emplooyees experience different opportunities in two well-defined measures of firm-sponsored training: on-the-job training and classroom training. While we find no differences in on-the-job training between different groups, our results suggest that visible minority immigrants are significantly less likely to receive classroom training, and receive fewer and shorter classroom training courses, an experience that is not shared by white immigrants. For male visible minority immigrants, these gaps are entirely driven by their differential sorting into workplaces with fewer training opportunities. For their female counterparts, however, they are mainly driven by differences that emerge within workplaces. We find no evidence that years spent in Canada or education level can appreciably reduce these gaps. Accounting for potential differences in career paths and hierarchical level also fails to explain these differences. We find, however, that these gaps are only experienced by visible minority immigrants who work in the for-profit sector, with those in the nonprofit sector experiencing positive or no gaps in training. Finally, we show that other poor labor market outcomes of visible minority immigrants, including their wages and promotion opportunities, stem in part from these training gaps.     

Impact of exchange rate volatility on commodity trade between US and Hong Kong

The impact of exchange rate uncertainty on trade flows is still the center of attention in international economics. A few studies that have looked at this effect in Hong Kong have used either aggregate data between Hong Kong and the rest of the world or between Hong Kong and several of her major trading partners. They have been unable to locate any significant effect. Suspecting that existing studies could suffer from aggregation bias, we concentrate on the trade between Hong Kong and the US and disaggregate their trade flows further by commodity. Out of 140 Hong Kong importing industries and 104 exporting industries considered, we find short-run effects in the majority of the industries. The short-run effects translated into the long run in 81 of Hong Kong import industries and 51 of her export industries, a finding that contradicts previous research.     

On the asymmetric effects of the real exchange rate on domestic investment in G7 countries

Two studies have assessed the symmetric and asymmetric effects of exchange rate changes on domestic investment. One included six emerging countries and the other one, 18 African nations. Both revealed that using nonlinear models to assess the asymmetric effects yield a more significant outcome compared to symmetric and linear models. We add to this small literature by showing the same using quarterly data from each of the G7 countries. Indeed, nonlinear models produced relatively more short-run and long-run effects of changes in the real effective exchange rate on domestic investment, though in an asymmetric manner.     

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.     

Dynamic Reserve Adjustment Under Varying Balance of Payments Positions

Most studies on dynamic reserve demand assume that countries respond symmetrically to positive and negative deviations of actual From desired reserves. The present study demonstrates that for a sample of developed countries (DCs), balance of payments deficits induce a faster response (higher speed of adjustment) than do surpluses. The opposite is true for the sample of developing countries (LDCs) tested. However, the size of the gap rather than whether excess demand is positive or negative seems to be the determining factor of adjustment speeds in the case of the LDC sample. [F 31]