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Exchange Rate Volatility and Import Trade Flow Evidence From India-U.S. at Industry Level

Exchange Rate Volatility and Import Trade Flow Evidence From India-U.S. at Industry Level

Mohini Gupta, Sakshi Varshney
Copyright: © 2021 |Volume: 12 |Issue: 3 |Pages: 21
ISSN: 1947-9638|EISSN: 1947-9646|EISBN13: 9781799861065|DOI: 10.4018/IJABIM.20210701.oa25
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MLA

Gupta, Mohini, and Sakshi Varshney. "Exchange Rate Volatility and Import Trade Flow Evidence From India-U.S. at Industry Level." IJABIM vol.12, no.3 2021: pp.1-21. http://doi.org/10.4018/IJABIM.20210701.oa25

APA

Gupta, M. & Varshney, S. (2021). Exchange Rate Volatility and Import Trade Flow Evidence From India-U.S. at Industry Level. International Journal of Asian Business and Information Management (IJABIM), 12(3), 1-21. http://doi.org/10.4018/IJABIM.20210701.oa25

Chicago

Gupta, Mohini, and Sakshi Varshney. "Exchange Rate Volatility and Import Trade Flow Evidence From India-U.S. at Industry Level," International Journal of Asian Business and Information Management (IJABIM) 12, no.3: 1-21. http://doi.org/10.4018/IJABIM.20210701.oa25

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Abstract

The centre interest of the study is to explore the impact of exchange rate volatility on the India-U.S. trade flow of Import on 6 industries spanned from September 2002 to June 2019. We investigate the relationship at disaggregate level by industry-wise data with monthly frequency. We employ exponential generalized autoregressive conditional heteroscedasticity (E-GARCH) model to gauge volatility and thereafter ARDL bound testing approach to unveil the short and long-run association of real exchange rate volatility and import. The empirical analysis implies the existence of both short-run and long-run effect in 5 importing industries except manufactured (engineering) goods. While real exchange volatility appears to have statistically significant effect in short-run, but also estimated short-run lasts onto long-run effect in only three industries. The results confirm the information of import in time-series analysis. The finding of the study helps to undertake the view of invariability and considering the industry before policy making.