Revisiting ECOWAS-Eurozone exports in the light of asymmetry
AbstractThis article evaluates the asymmetric impact of exchange rate volatility on the exports of nine ECOWAS countries to the Eurozone. By comparing Autoregressive Distributed Lag (ARDL) and Nonlinear ARDL (NARDL) models, the study concludes that the effect of volatility on ECOWAS-Eurozone exports...
| Main Authors: | , , , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2024-12-01
|
| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2024.2309812 |
| _version_ | 1797324307262603264 |
|---|---|
| author | Sagiru Mati Goran Yousif Ismael Serag Masoud Karzan Qader Hamad Abdullahi Ahmed Mohammed Mustapha Hussaini |
| author_facet | Sagiru Mati Goran Yousif Ismael Serag Masoud Karzan Qader Hamad Abdullahi Ahmed Mohammed Mustapha Hussaini |
| author_sort | Sagiru Mati |
| collection | DOAJ |
| description | AbstractThis article evaluates the asymmetric impact of exchange rate volatility on the exports of nine ECOWAS countries to the Eurozone. By comparing Autoregressive Distributed Lag (ARDL) and Nonlinear ARDL (NARDL) models, the study concludes that the effect of volatility on ECOWAS-Eurozone exports (EEE) is asymmetric. The study also investigates the impact of foreign income and prices on the EEE and categorises the goods and services that make up the EEE for each country based on their coefficients. The results show that exchange rate volatility has an asymmetric effect on the EEE, which comprise both substitute and inferior goods. The study recommends that ECOWAS authorities avoid using proportional policies to address increased and decreased volatility, as their impact on trade is asymmetric. The long-run coefficients of income for Nigeria, Togo, and Benin are -1.29, -4.67, and -2.64 respectively, indicating that their exports are dominated by inferior goods. The long-run coefficients of foreign price for Nigeria, Niger, and Burkina Faso are 5.32, 7.87, and 1.91 respectively, suggesting that their exports are mainly substitute goods. The authors confirm long-run asymmetry for three out of nine countries and short-run asymmetry for five countries. Only three countries have an asymmetric trade-volatility relationship in both the short and long run. The study suggests that Nigeria, Togo, and Benin diversify their economies, as their exports to the Eurozone are dominated by inferior goods and services. Additionally, the study recommends that the governments of Nigeria, Niger, and Burkina Faso provide support, as their goods and services are substitutes. |
| first_indexed | 2024-03-08T05:54:10Z |
| format | Article |
| id | doaj.art-fde6d307f52546c281f6a25ba7b175f1 |
| institution | Directory Open Access Journal |
| issn | 2332-2039 |
| language | English |
| last_indexed | 2024-03-08T05:54:10Z |
| publishDate | 2024-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj.art-fde6d307f52546c281f6a25ba7b175f12024-02-05T06:01:43ZengTaylor & Francis GroupCogent Economics & Finance2332-20392024-12-0112110.1080/23322039.2024.2309812Revisiting ECOWAS-Eurozone exports in the light of asymmetrySagiru Mati0Goran Yousif Ismael1Serag Masoud2Karzan Qader Hamad3Abdullahi Ahmed Mohammed4Mustapha Hussaini5Operational Research Center in Healthcare, Near East University, Nicosia, North CyprusDepartment of Business Administration, Noble Technical Institute, Erbil, Northern IraqDepartment of Banking and Finance, University of Benghazi, Benghazi, LibyaDepartment of Tourism Administration, College of Administration and Economics, Lebanese French University, Erbil, IraqDepartment of Economics, Yusuf Maitama Sule University, Kano, NigeriaSchool of General and Preliminary Studies, Sule Lamido University, Jigawa, NigeriaAbstractThis article evaluates the asymmetric impact of exchange rate volatility on the exports of nine ECOWAS countries to the Eurozone. By comparing Autoregressive Distributed Lag (ARDL) and Nonlinear ARDL (NARDL) models, the study concludes that the effect of volatility on ECOWAS-Eurozone exports (EEE) is asymmetric. The study also investigates the impact of foreign income and prices on the EEE and categorises the goods and services that make up the EEE for each country based on their coefficients. The results show that exchange rate volatility has an asymmetric effect on the EEE, which comprise both substitute and inferior goods. The study recommends that ECOWAS authorities avoid using proportional policies to address increased and decreased volatility, as their impact on trade is asymmetric. The long-run coefficients of income for Nigeria, Togo, and Benin are -1.29, -4.67, and -2.64 respectively, indicating that their exports are dominated by inferior goods. The long-run coefficients of foreign price for Nigeria, Niger, and Burkina Faso are 5.32, 7.87, and 1.91 respectively, suggesting that their exports are mainly substitute goods. The authors confirm long-run asymmetry for three out of nine countries and short-run asymmetry for five countries. Only three countries have an asymmetric trade-volatility relationship in both the short and long run. The study suggests that Nigeria, Togo, and Benin diversify their economies, as their exports to the Eurozone are dominated by inferior goods and services. Additionally, the study recommends that the governments of Nigeria, Niger, and Burkina Faso provide support, as their goods and services are substitutes.https://www.tandfonline.com/doi/10.1080/23322039.2024.2309812Asymmetric relationshipECOWASeurozoneexchange rate volatilityIGARCHNARDL |
| spellingShingle | Sagiru Mati Goran Yousif Ismael Serag Masoud Karzan Qader Hamad Abdullahi Ahmed Mohammed Mustapha Hussaini Revisiting ECOWAS-Eurozone exports in the light of asymmetry Cogent Economics & Finance Asymmetric relationship ECOWAS eurozone exchange rate volatility IGARCH NARDL |
| title | Revisiting ECOWAS-Eurozone exports in the light of asymmetry |
| title_full | Revisiting ECOWAS-Eurozone exports in the light of asymmetry |
| title_fullStr | Revisiting ECOWAS-Eurozone exports in the light of asymmetry |
| title_full_unstemmed | Revisiting ECOWAS-Eurozone exports in the light of asymmetry |
| title_short | Revisiting ECOWAS-Eurozone exports in the light of asymmetry |
| title_sort | revisiting ecowas eurozone exports in the light of asymmetry |
| topic | Asymmetric relationship ECOWAS eurozone exchange rate volatility IGARCH NARDL |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2024.2309812 |
| work_keys_str_mv | AT sagirumati revisitingecowaseurozoneexportsinthelightofasymmetry AT goranyousifismael revisitingecowaseurozoneexportsinthelightofasymmetry AT seragmasoud revisitingecowaseurozoneexportsinthelightofasymmetry AT karzanqaderhamad revisitingecowaseurozoneexportsinthelightofasymmetry AT abdullahiahmedmohammed revisitingecowaseurozoneexportsinthelightofasymmetry AT mustaphahussaini revisitingecowaseurozoneexportsinthelightofasymmetry |