Dynamics of Trade Balance & J-curve Revisited : New Insights for Electronics Industry in Selected ASEAN Countries

GOH, KAI YI (2020) Dynamics of Trade Balance & J-curve Revisited : New Insights for Electronics Industry in Selected ASEAN Countries. [Final Year Project Report] (Unpublished)

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Abstract

Many studies have been conducted to investigate the J-curve effect by using aggregate data of trade balance. However, the implication of J-curve using disaggregate data has been rarely explored. In this view, the present study attempts to apply the trade balance data at disaggregate level to assess the implication of J-curve effect on international trade flow of electronics related products between the selected ASEAN countries and US. To achieve this aim, econometric analysis has been applied on the yearly electronic related trade balance data from 1988-2018. The long run status relationship between the electronic trade balance and real exchange rate has been examined via Pesaran, Shin and Smith (2001) bound testing approach. Moreover, the autoregressive distribute lag (ARDL) model was applied to analyse the long-run and short-run parameter estimates. Besides, error correction term (ECM) has been computed along ARDL model to confirm the presence of convergence to long run equilibrium. Results showed only Singapore possesses short-run and long-run J-curve effect.

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