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The Effects of Foreign Exchange Rate Changes On Asean Exports
Muhammad Najib bin Samsudin
Supervisor: Dr Zairihan binti Abdul Halim
Bachelor of Economics (Natural Resources)
School of Social and Economic Development
This paper explores the causal relationship between total export and foreign exchange
rates in 10 ASEAN countries over the period of 2009-2016. Additionally, this study also
examines the effects of changes in foreign exchange rates, percentage of commodity
prices, foreign national income and technological change on palm oil exports, exports of
electrical goods, exports of petroleum products, exports of machinery, and exports of
chemicals. Panel cointegration and causality tests are performed to examine the long-run
and causal relationship between variables. Results confirm that there is no presence of
cointegration between variables. Empirical results of full sample analysis shows that
foreign exchange rates positively influence total exports. Other explanatory factors such
as percentage of commodity prices, foreign income and technology changes are also
found to have a positive effect on exports. Furthermore, the impact of foreign exchange
rates, percentage of commodity prices, foreign income and technology changes on palm
oil exports, exports of electrical goods, exports of petroleum products, exports of
machinery, and exports of chemicals are also found to be positive. The panel Granger
causality analysis reveals the bidirectional causality between total exports and patent
application, total exports and exchange rate.
1468 | UMT UNDERGRADUATE RESEARCH DAY 2018