Commerce and Management

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    The Effect of Exports and Imports on Exchange Rate over Short and Long Time Horizons: Evidence from Asian Countries
    (Department of Finance, University of Kelaniya., 2021) Dissanayake, D. M. U. H.; Kethmi, G. A. P.
    Purpose: The purpose of this study is to examine the effect of export and imports on exchange rates. Design/Methodology/Approach: This study includes eighteen Asian countries as the sample for the period of ten years from 2010 to 2019 and analyzed using Autoregressive Lag (ARDL) model. Annual exports and imports of each country are used as the Independent variable along with the dependent variable, real exchange rate. Findings: The results show that the impact of exports on the exchange rate is significant and negative in both short and long run. However, the impact of imports on the exchange rate is significant and negative in short run whereas the effect is significant and positive in the long run. Originality: This study uses Asian countries as the context of the study to examine the effect of exports and imports on real exchange rate. There are a limited number of studies have examined the current debate by covering the entire Asian Region. In examining the relationship between international trade and exchange rate, the majority of the literature investigate the impact of exchange rate on imports and exports whereas; this study contributes to the literature by examining the impact of exports and imports on exchange rate over the short and long-time horizons.
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    Impact of Exchange Rate Volatility on Sri Lanka’s Trade Growth
    (Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) AL Soos, M.Y.M.; Madurapperuma, M.W.
    The exchange rate regime and foreign policy is an important measure of the macroeconomic management in endeavoring for economic development through improving the performance of export of the country. Many scholars pay their attention to study the impact of exchange rate volatility on the export growth. However, these studies do not provide a definite result that increased uncertainty has reduced exports, the majority of empirical research have found that there is a negative relationship between exchange rate volatility and export performance. The conclusion drawn from recent empirical literature is insignificant between export and exchange rate volatility. Very few studies found significant relationships between export and exchange rate volatility. Therefore, the purpose of this study is to investigate the impact of exchange rate volatility on exports in Sri Lanka. The research used quarterly data during the period 2000 to 2015. Data of this study was analyzed using cointegration, vector error correction model (VECM) and GARCH techniques. Findings of this study show that the presence of a unique cointegrating vector linking real exports, relative export prices, real exchange rate volatility in the long run. Real exchange rate volatility exerts significant negative effects on exports both in the short run and the long run. Further findings of this study show that real exchange rate impact positively on export. Overall, findings of these results show that trading activities of Sri Lanka can be improved by maintaining a stable competitive real exchange rate.