Climate change and export: case study of China and Indonesia

Yee, Wei Long (2013) Climate change and export: case study of China and Indonesia. [Final Year Project Report] (Unpublished)

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Abstract

The purpose of this study is to investigate the effects of climate change to the export in both countries: China and Indonesia in both short run and long run. There are three variables which comprise of temperature, precipitation and production of cereal, which are supported by previous studies, are being employed to test on the relationship with the export. There are a total of 34 annual observations for each variable from 1975 till 2008. All of the variables are obtained from the World Bank and Terrestrial Air Temperature and Precipitation. The variables will be subjected to several empirical analyses to identify the factors that affecting the export in the short run. Specifically, ADF unit root test, Johansen and Juselius cointegration test, Vector Autoregressive (VAR) model and Granger causality test have been used in this study. The empirical results indicate that there is only a short run relationship between the export and production in China. The findings are important for policy makers to prepare for the effects of climate change in future.

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