Exchange rate volatility and its effect on intra-East Africa Community regional trade
East Africa Community exchange rate volatility spiraled up when the countries adopted the Structural Adjustment Policies in early 1980s. The question that remains unanswered is whether exchange rate volatility hinders or promotes trade. The objective of this study was to determine the effect of exch...
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Source: | Latin American Journal of Trade Policy, ISSN 0719-9368, Vol. 4, Nº. 9, 2021 (Ejemplar dedicado a: Latin American Journal of Trade Policy), pags. 43-53 |
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dialnet-ar-18-ART00014530702021-05-06 Exchange rate volatility and its effect on intra-East Africa Community regional tradeMosbei, ThomasSamoei, Silas KipronoTison, Clement CheruiyotKipchoge, Edwin KipyegoEast Africa Community exchange rate volatility spiraled up when the countries adopted the Structural Adjustment Policies in early 1980s. The question that remains unanswered is whether exchange rate volatility hinders or promotes trade. The objective of this study was to determine the effect of exchange rate volatility and its effect on Intra-East Africa community regional trade. Unit root tests results indicated that some of the variables were stationary at levels and on first difference, all variables were I(1). Differenced panel data was fitted into the General Autoregressive Conditional Heteroscedasticity model to measure volatility. Hausman test showed that the fixed effect model was appropriate exchange rate, money supply, population and foreign direct investment significantly determines intra-East Africa Community regional trade. It was concluded that exchange rate volatility is observable in the Intra-East Africa region and further, exchange rate, money supply, population, and foreign direct investment significantly influenced intra-EAC regional trade. It is recommended that EAC member states should formulate policies that ensures exchange rate stability in the region to reduce unpredictability of exchange rate. Policies should be enacted to guarantee adequate money supply and encourage foreign direct investments.2021text (article)application/pdfhttps://dialnet.unirioja.es/servlet/oaiart?codigo=7895330(Revista) ISSN 0719-9368Latin American Journal of Trade Policy, ISSN 0719-9368, Vol. 4, Nº. 9, 2021 (Ejemplar dedicado a: Latin American Journal of Trade Policy), pags. 43-53engLICENCIA DE USO: Los documentos a texto completo incluidos en Dialnet son de acceso libre y propiedad de sus autores y/o editores. Por tanto, cualquier acto de reproducción, distribución, comunicación pública y/o transformación total o parcial requiere el consentimiento expreso y escrito de aquéllos. Cualquier enlace al texto completo de estos documentos deberá hacerse a través de la URL oficial de éstos en Dialnet. Más información: https://dialnet.unirioja.es/info/derechosOAI | INTELLECTUAL PROPERTY RIGHTS STATEMENT: Full text documents hosted by Dialnet are protected by copyright and/or related rights. This digital object is accessible without charge, but its use is subject to the licensing conditions set by its authors or editors. Unless expressly stated otherwise in the licensing conditions, you are free to linking, browsing, printing and making a copy for your own personal purposes. All other acts of reproduction and communication to the public are subject to the licensing conditions expressed by editors and authors and require consent from them. Any link to this document should be made using its official URL in Dialnet. More info: https://dialnet.unirioja.es/info/derechosOAI
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Latin American Journal of Trade Policy, ISSN 0719-9368, Vol. 4, Nº. 9, 2021 (Ejemplar dedicado a: Latin American Journal of Trade Policy), pags. 43-53
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East Africa Community exchange rate volatility spiraled up when the countries adopted the Structural Adjustment Policies in early 1980s. The question that remains unanswered is whether exchange rate volatility hinders or promotes trade. The objective of this study was to determine the effect of exchange rate volatility and its effect on Intra-East Africa community regional trade. Unit root tests results indicated that some of the variables were stationary at levels and on first difference, all variables were I(1). Differenced panel data was fitted into the General Autoregressive Conditional Heteroscedasticity model to measure volatility. Hausman test showed that the fixed effect model was appropriate exchange rate, money supply, population and foreign direct investment significantly determines intra-East Africa Community regional trade. It was concluded that exchange rate volatility is observable in the Intra-East Africa region and further, exchange rate, money supply, population, and foreign direct investment significantly influenced intra-EAC regional trade. It is recommended that EAC member states should formulate policies that ensures exchange rate stability in the region to reduce unpredictability of exchange rate. Policies should be enacted to guarantee adequate money supply and encourage foreign direct investments.
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Article
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author |
Mosbei, Thomas
Samoei, Silas Kiprono Tison, Clement Cheruiyot Kipchoge, Edwin Kipyego |
spellingShingle |
Mosbei, Thomas
Samoei, Silas Kiprono Tison, Clement Cheruiyot Kipchoge, Edwin Kipyego Exchange rate volatility and its effect on intra-East Africa Community regional trade |
author_facet |
Mosbei, Thomas
Samoei, Silas Kiprono Tison, Clement Cheruiyot Kipchoge, Edwin Kipyego |
author_sort |
Mosbei, Thomas
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title |
Exchange rate volatility and its effect on intra-East Africa Community regional trade
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title_short |
Exchange rate volatility and its effect on intra-East Africa Community regional trade
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title_full |
Exchange rate volatility and its effect on intra-East Africa Community regional trade
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title_fullStr |
Exchange rate volatility and its effect on intra-East Africa Community regional trade
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title_full_unstemmed |
Exchange rate volatility and its effect on intra-East Africa Community regional trade
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title_sort |
exchange rate volatility and its effect on intra-east africa community regional trade
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publishDate |
2021
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https://dialnet.unirioja.es/servlet/oaiart?codigo=7895330
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1709754237859135488
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