This paper examines the Granger causal relationship between capital flows and economic growth in China over the period 1998Q1–2019Q2,allowing for real effective exchange rate(REER)effects.As parameter instability tes...This paper examines the Granger causal relationship between capital flows and economic growth in China over the period 1998Q1–2019Q2,allowing for real effective exchange rate(REER)effects.As parameter instability tests indicate structural changes,we use bootstrap rolling window causality tests,which suggest that the causal nexus between capital flows and GDP growth is time-varying.We find that the causal links between foreign direct investments(FDIs)and GDP growth are hardly affected by the REER,whereas the REER plays a more important role in affecting the causal connections between portfolio investments and other investments and GDP growth.Our results suggest that cumulative portfolio inflows and cumulative other investment inflows harm GDP growth,whereas cumulative portfolio outflows and cumula-tive other investment outflows positively affect GDP growth.展开更多
An important limitation of the research literatures which study the effect on the export of the real effective exchange rates is the lack of application of interaction or moderator effect among the independent variabl...An important limitation of the research literatures which study the effect on the export of the real effective exchange rates is the lack of application of interaction or moderator effect among the independent variables. To remedy this lacuna, the authors developed a model in which real effective exchange rate moderated the effect of import and utilization of foreign capital on export. The sample comprised 11 years＇ data in Guangdong China. The result showed that real effective exchange rate of RMB affected the export by interacting with utilization of foreign capital. Moreover, to some degree, the real effective exchange rate can also act as moderator between import and export.展开更多
Using data for the period 2000-2011, we construct province-level real effective exchange rate （REER） indices for China and test the effect of REER depreciation on regional economic growth in a generalized method of ...Using data for the period 2000-2011, we construct province-level real effective exchange rate （REER） indices for China and test the effect of REER depreciation on regional economic growth in a generalized method of moments regression framework. Our results show that REER depreciation, in general, promotes regional economic growth, through increasing net exports and lowering FDI costs. After dividing the full sample into coastal and inland subsamples, we find that REER depreciation influences economic growth in inland areas but not in coastal areas. This is due to the fact that the inland areas have more surplus labor or other resources to expand their production capacity when REER depreciation leads to increased worm demand. Furthermore, compared to inland areas, processing-and-assembly trade comprises a larger share of trade in the coastal areas, where traders import more raw materials and intermediate goods to process and assemble goods. When the exchange rate depreciates, the costs of imported materials and immediate goods increase. In this case, the benefits from REER depreciation in coastal areas are offset to some extent and are thus lower than in inland areas.展开更多
This paper measures the industry-specific real effective exchange rate （REER） for China by matching domestic and foreign industry-level price and trade data series. We find that after 2005 the REER appreciates more ...This paper measures the industry-specific real effective exchange rate （REER） for China by matching domestic and foreign industry-level price and trade data series. We find that after 2005 the REER appreciates more in the ＂chemical, plastics, rubber and fuels industry＂ and the ＂＇machinery and equipment industry,＂ but remains roughly constant or even depreciates in other industries. The nominal exchange rate generally accounts for over 50 percent of the aggregate real effective exchange rate JTuetuations, but this conclusion does not apply to three of nine industries. We apply the industry-specific REER to re-examine the relationship between the exchange rate and trade, and find that the industry-specific REER index performs better than the traditional aggregate REER index. We recommend that the Chinese Government officially adopt industry-specific exchange rates instead of using the aggregate effective exchange rates to evaluate the competitiveness of Chinese industries in the international market.展开更多
文摘This paper examines the Granger causal relationship between capital flows and economic growth in China over the period 1998Q1–2019Q2,allowing for real effective exchange rate(REER)effects.As parameter instability tests indicate structural changes,we use bootstrap rolling window causality tests,which suggest that the causal nexus between capital flows and GDP growth is time-varying.We find that the causal links between foreign direct investments(FDIs)and GDP growth are hardly affected by the REER,whereas the REER plays a more important role in affecting the causal connections between portfolio investments and other investments and GDP growth.Our results suggest that cumulative portfolio inflows and cumulative other investment inflows harm GDP growth,whereas cumulative portfolio outflows and cumula-tive other investment outflows positively affect GDP growth.
文摘An important limitation of the research literatures which study the effect on the export of the real effective exchange rates is the lack of application of interaction or moderator effect among the independent variables. To remedy this lacuna, the authors developed a model in which real effective exchange rate moderated the effect of import and utilization of foreign capital on export. The sample comprised 11 years＇ data in Guangdong China. The result showed that real effective exchange rate of RMB affected the export by interacting with utilization of foreign capital. Moreover, to some degree, the real effective exchange rate can also act as moderator between import and export.
文摘Using data for the period 2000-2011, we construct province-level real effective exchange rate （REER） indices for China and test the effect of REER depreciation on regional economic growth in a generalized method of moments regression framework. Our results show that REER depreciation, in general, promotes regional economic growth, through increasing net exports and lowering FDI costs. After dividing the full sample into coastal and inland subsamples, we find that REER depreciation influences economic growth in inland areas but not in coastal areas. This is due to the fact that the inland areas have more surplus labor or other resources to expand their production capacity when REER depreciation leads to increased worm demand. Furthermore, compared to inland areas, processing-and-assembly trade comprises a larger share of trade in the coastal areas, where traders import more raw materials and intermediate goods to process and assemble goods. When the exchange rate depreciates, the costs of imported materials and immediate goods increase. In this case, the benefits from REER depreciation in coastal areas are offset to some extent and are thus lower than in inland areas.
基金supported by the Fundamental Research Funds for the Central Universities(No.2012WYB34)from Beijing Normal University
文摘This paper measures the industry-specific real effective exchange rate （REER） for China by matching domestic and foreign industry-level price and trade data series. We find that after 2005 the REER appreciates more in the ＂chemical, plastics, rubber and fuels industry＂ and the ＂＇machinery and equipment industry,＂ but remains roughly constant or even depreciates in other industries. The nominal exchange rate generally accounts for over 50 percent of the aggregate real effective exchange rate JTuetuations, but this conclusion does not apply to three of nine industries. We apply the industry-specific REER to re-examine the relationship between the exchange rate and trade, and find that the industry-specific REER index performs better than the traditional aggregate REER index. We recommend that the Chinese Government officially adopt industry-specific exchange rates instead of using the aggregate effective exchange rates to evaluate the competitiveness of Chinese industries in the international market.
