• The Journal of Asian Finance, Economics and Business
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• v.9 no.7
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• pp.27-39
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• 2022

The exchange rate is an important macroeconomic variable that influences internal and external balances. Nepal follows a dual exchange rate such that the Nepali rupee (NPR) is pegged with the Indian rupee (INR) but floats with the United States dollar (USD) and all other currencies. There have been very few studies on the exchange rate of Nepal, of which the majority focus on the bivariate relationship between exchange rate and another variable. However, this paper analyses the multivariate relationship between the USD-NPR exchange rate and major macroeconomic variables. Determinants of Nepal's exchange rate have been derived with multiple regression using the ordinary least square (OLS) approach. Since the explanatory variables could not significantly capture the movement of the dependent variable, a long-run relationship between Nepal and India's exchange rate has been analyzed using Engle-Granger cointegration to establish a relationship as suggested by a graphical representation. This explains that Nepal's exchange rate long run is determined by India's exchange rate than its own fundamentals. In addition, the macro-linkages of Nepal's macroeconomic variables have been analyzed using Standard Vector Autoregressive models followed by impulse response analysis which is useful for policy decisions. Some policy implications indicating the sustainability of Nepal's pegged regime have been drawn based on the empirical analysis.

• Management & Information Systems Review
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• v.37 no.3
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• pp.65-81
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• 2018

This study estimated the long-run and the short-run price and income elasticity of crude oil demand by using the ARDL model in Korea. First, the long-run cointegration relationship existed between crude oil demand and price or income in the ARDL-bounds tests. Second, the long-run own price, the cross price elasticity and the income elasticity were both statistically significant elastic and sensitive in the ARDL. Third, there was autocorrelation of the residuals, but no misspecification errors and heteroscedasticity, and then the residuals showed a normal distribution. And the CUSUM & CUSUMSQ tests showed that the coefficients were stable. Fourth, the short-run own price, the cross price elasticity and the income elasticity were both statistically significant elastic and sensitive in the ARDL-RECM. The ECM with the short-run dynamics showed rapid adjustments in the long-run equilibrium of oil demand after the economic crisis. In the short-run, the sensitivity of crude oil demand to price and income changes has moved in the same direction as the long-run case. Korea, depending too much on foreign crude oil, is vulnerable to the shocks of oil prices, so rising oil prices can certainly have a negative impact on Korea's trade balance. And the elasticity of long-run oil prices may help to control and manage Korea's oil demand. The government needs to strengthen monitoring of the country's policies and market trends related to crude oil, establish strategies to customize national policies and market conditions, and strengthen active market dominance efforts through pioneering new market and diversification.

• The Journal of Industrial Distribution & Business
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• v.9 no.7
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• pp.33-42
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• 2018

Purpose - This paper aims to verify whether the Fisher effect and the international Fisher effect are significant between China and South Korea in the long and short run, respectively. Research design, data, and methodology - The annual and monthly data, respectively, are employed to conduct an empirical estimation under the fully modified ordinary least squares(FMOLS). The nominal interest rate is treated as an independent variable. The inflation rate is treated as a dependent variable. Results - The results exhibit whenever in the long or short run, the Fisher effect exists in China and South Korea. However, the Fisher effect in South Korea is more significant than that of in China. Meanwhile, an empirical analysis is also preformed to investigate the long-run and the short-run international Fisher effect between China and South Korea. The deviation from the equilibrium relationship is that the commodity market and the Financial market have started to integrate in China. But China's integrated level proved to be relatively lower. Conclusions - To exploit that the Fisher effect and the international Fisher effect hold between China and South Korea can help both countries deal with the sufferings from integration of the commodity market and the financial market.

• Journal of the Korean Institute of Illuminating and Electrical Installation Engineers
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• v.28 no.7
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• pp.97-105
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• 2014

This article examines the causality relationship among SMP, base-load share, LNG import price, and exchange rate in Korean power market during 2002~2012, using unit root test, cointegration test, and vector error correction model(VECM). The cointegration test shows that 4 variables without unit root have been in the long-run causality. As the results of ECM, SMP is analyzed to have been unilaterally caused from LNG import price and base-load share in the shot-run, while it has been unilaterally caused from LNG import price and exchange rate in the long-run. This article has the following policy implications: the adjustment of exchange rate to reduce he risk of LNG import price and the proper securement of base-load share for the long-run stability of SMP.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.10
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• pp.229-238
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• 2021

The article applies the ECM - ARDL model to examine the relationship between economic indicators and the existence of the disease in the long run of 10 ASEAN countries from 2000 to 2019. There are two models: The first model investigates the impact of GDP per capita, net inflow FDI, unemployment rate, and inflation rate on the proportion of export to GDP of ASEAN countries, the second model is similar to the first one but adds one more variable to the independent variable list - 'the variable for disease'. The results prove the long-run effect of GDP per capita, FDI, unemployment and inflation rate on export of the selected countries, though individual country shows differences in the sign and magnitude of these impacts. Surprisingly, the number of people suffering from disease does not affect the export of all selected countries as expected. The results of the two models also indicate that the disequilibrium in the short run converges to the equilibrium in the long run with a high proportion, especially in the case of Cambodia and the Philippines, with the rate of 95.65% and 151.94%, respectively. The findings can be useful for policymakers in promulgating efficient policies to enhance the trading activities of the selected countries.

• Korea Trade Review
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• v.44 no.1
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• pp.17-30
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• 2019

This study is to investigate the effect of real exchange rate on bilateral trade balance between Korea and ASEAN 10 countries. Using quarterly data from 1991 to 2017 the paper analyzes whether or not the real depreciation of Korea's won could improve the trade balance in the short and long term. Based on Autoregressive Distributed Lag(ARDL) model, the empirical results show that trade balance, GDP, and real exchange rate are all cointegrated, representing the long-run relationship among variables. In the consideration of long-run relationship, the increases in ASEAN countries' GDP could have a negative impact and Korea's GDP positive impact on trade balance between Korea and ASEAN countries unexpectedly. For the main variable, the paper did not find the long-term effect of real exchange rate on the trade balance, for the short-term effect of the real exchange rate it was found that there exists the J-curve effect only in the case of Vietnam and Brunei. Therefore, these results imply that the intended policy concerning the exchange rate in the free-floating exchange rate system could be limited to improve the trade balance between Korea and ASEAN countries.

• The Journal of Asian Finance, Economics and Business
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• v.4 no.4
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• pp.61-66
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• 2017

Environmental awareness and its relation to the development of economy has garnered increased attention in recent years. Researchers, over the years, have argued that sustainable development warrants for minimizing environmental degradation since one depends on the other. This study analyzes the relationship between environmental degradation (carbon emission taken as proxy for degradation), economic growth, total energy consumption and industrial production index growth in Bangladesh from year 1998 to 2013. This study uses Vector Autoregression (VAR) Model and variance decomposition of VAR to analyze the effect of these variables on carbon emission and vice-versa. The findings of VAR model suggest that industrial production and GDP per capita has significant relationship with carbon emission. Further analysis through variance decomposition shows carbon emission has consistent impact on industrial production over time, whereas, industrial production has high impact on emission in the short run which fades in the long run which is consistent with Environmental Kuznets Curve (EKC) hypothesis. Carbon emission rising along with GDP per capita and at the same time having low impact in the long run on industrial index indicates there may be other sources of pollution introduced with the rise in income of the economy over time.

• Journal of Distribution Science
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• v.11 no.7
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• pp.15-22
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• 2013

Purpose - The study investigates the influence of tourism and hospitality industry on economic growth and CO2 emissions. Research design, data, and methodology - In the empirical analysis, unit root tests, cointegration test and vector error correction model regression using time series data of South Korea from the first quarter of 1970 to the third quarter of 2010 are performed to examine the long-run equilibrium relationship and short-run dynamics among the tourism and hospitality industry, CO2 emissions, economic growth and other industry sectors. Results - Results indicate that a long-run equilibrium relationship exists among these variables. Furthermore, the tourism and hospitality industry and CO2 emissions have high significant positive effect on economic growth. The tourism and hospitality industry in Korea, in turns, shows a high significant positive impact on economic growth while the industry sector incursa high significant negative impact on CO2 emissions. Conclusions - The tourism and hospitality industry in Korea may havebeen prompted by several factors such as accelerated process of technological innovation or energy and environmental policies. These findings suggest that the effectively managed tourism and hospitality sector in Korea has resulted in both economic growth and a reduction in CO2 emissions.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.2
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• pp.111-122
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• 2021

The main purpose of the present research is to analyze the effects of trade, financial globalization, and technological progress on income inequality in the Indian economy over the period from 1982 to 2018. For this purpose, the study uses economic growth, financial globalization, trade openness, technological development, and economic inequality variables with appropriate proxies. The study employs the Auto Regressive Distributed Lag (ARDL) approach to co-integration and VECM based Granger causality approach to estimate both the short-run and long-run relationship and causality among variables. Using the ARDL bounds test, the study finds a long-run co-integrating relationship existing among the variables in the model. The study confirms the existence of a positive and significant impact of technological progress on income inequality. Further, globalization's limited impact reflects two offsetting tendencies; trade globalization is associated with a reduction in income inequality, while financial globalization is related to an increase in inequality. The results of VECM based Granger causality approach further confirm that technological progress, trade, and financial globalization causes income inequality both directly and indirectly through economic growth and inflation. In case of India, the results of this research can significantly facilitate stakeholders and policymakers in devising policies towards effective globalization and technological innovation for inclusive growth.

• Journal of the Korean Society for information Management
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• v.28 no.3
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• pp.31-46
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• 2011

Information literacy of the individuals affects their competitive capability significantly by providing problem solving skills in the short run, and by enabling life-long learning in the long run. This study examines if information literacy capacity has any relationship with individuals' achievement level through the experiment with college student subject group. As evidences for individual achievement level, we adopted GPA's(grade point average) of students. As a result, it was confirmed that information literacy and academic achievements has positive relationship. Additionally, it has been found that this relationship has a tendency of sustaining for a significant period. These experiment results would serve as a rationale for providing information literacy courses in the academic curriculum.