2.1 La comunicación en las organizaciones
2.1.1 Las organizaciones como sistemas orientados a objetivos
As reported in sub-section 5.2.1, the unrestricted error correction model of balance of payments and its components together with the diagnostic tests are presented in Appendices 5-20. The following test results are reported:
The correlogram of squared residuals is used to check for autoregressive conditional heteroskedasticity (ARCH) in the residual. The condition here is that if there is no ARCH in the residual, the autocorrelations and partial autocorrelations should be zero at all lags and the Q-statistics should not be statistically significant.
The other tests that considered were the Jarque-Bera Statistics, Serial correction LM test and the white Heteroskedasticity test
The Cumulative Sum (CUSUM) and CUSUM squares of the recursive residuals were used to determine the stability and reliability of the parameter estimates.
The CUSUM test is based on the cumulative sum of the recursive residuals. The option plots the cumulative sum together with the 5 percent critical lines. The test finds parameter instability if the cumulative sum goes outside the area between the two critical lines.
The recursive residuals show a plot of the recursive residuals about the zero line, plus and minus two standard errors and also shown at each point. Residual outside the standard error bands suggeste instabilityin the parameters of the equation.
131 Table 5.13: Summary of Selected Findings
Author Coverage Methodology Major Findings Pentti J.K. Kouri
(1976)
Dynamic model of exchange rate in the short-run and long-run.
In the long-run there is symmetry between the regime of fixed and flexible exchange rates37. The link between monetary policy and the inflow or
outflow of capital goes through the effect of monetary policy on aggregate demand and output and thereby on the current account, which thus determines the capital account.
Magda Kandil (2009)
Developing and
Developed Countries:
1971-2000
Rational-expectation model
Currency depreciation did not increase exports or imports in many developing countries Across the sampled countries, currency appreciation did not yield significant results on current account balance. While the effects of currency fluctuations appeared to be mixed on foreign direct investments flows.
Currency depreciation increases net financial flows to industrial countries. A deterioration in the current account balance correlated with an increase in net foreign direct investment flows and the financial account balance across developing countries.
37 Under fixed exchange rates, the exchange rate is exogenous and money supply endogenous. The contrary holds under flexible exchange ratesregimes.
132
Table 5.13: Summary of Selected Findings (cont.)
Author Coverage Methodology Major Findings
Baharumshah, A.Z.
et al,. (2004)
Singapore and Malaysia
Economies:1976-1999
Standard Monetary Model, Johansen-Juselius
Cointegration
Technique: Vector Error-Correction Model (VECM)
A strong cointegration relationship between exchange rate, money supply, GDP, and the current account balance.
That exchange rate adjusted to changes in current account balance.
High foreign capital inflows was found to have cause structural changes in the early 1990s.
Keshab R. Bhattarai and Mark K. Armah (2005)
Analysis of the Ghanaian Trade Balance: 1970-2000
Vector
Autoregressive (VAR) and Error Correction Model (ECM) Analysis.
Study confirmed a stable long-run relationship between exports, imports and the real exchange rate.
The short-run elasticities of exports and imports indicated contractionary effects of devaluation in terms of the Marshall-Lerner-Robinson
condition in the long-run.
133
Table 5.13: Summary of Selected Findings (cont.)
Author Coverage Methodology Major Findings Frimpong and
Adam (2010)
Ghana, 1990-2009
VAR Models Exchange rate pass-through to inflation is incomplete and gradually decreases. The short run influence is highly significant.
Al-Abri, A. S.
and Goodwin B.K. (2007)
5 out of 16 OECD countries:
1975-2002
Threshold Cointegration Model.
A significant threshold cointegrating relationship between the effective nominal exchange rate and import prices. Import prices respond faster (exceeding the 50% average
documented) and to a larger extent to nominal exchange rate changes.
McCarthy (2000)
Selected Industrialised Economies, 1976-1998
VAR Model External factors are found to have a unpretentious effect on domestic price inflation. The pass-through is high and stronger in countries with large import share.
Mwase (2006) Tanzania, 1990-2005
VAR Model Incomplete pass-through and declined in the 1990s despite depreciation of the exchange rate.
Rise in imports were also
experienced and acted as a major indicator of the high pass-through in the short-run.
134
Table 5.13: Summary of Selected Findings (cont.)
Author Coverage Methodology Major Findings
Bwire, et al., (2013)
Uganda, 1999-2012
SVAR Model Statistically significant relationship between exchange rate movements and inflation. The pass-through was incomplete but persistent.
Bangura, et al., (2012)
Sierra Leone, 1998-2011
SVAR Model Incomplete pass-through.
Exchange rate behaviour featured as one of the possible sources of inflation.
Petrovic, P and Gligoric, M (2009)
Serbia, 2002-2007
Johansen‘s and Autoregressive Distributed Lag (ARDL) approaches
Exchange rate depreciation improved trade balance in the long-run, while giving rise to a J-curve effect in the short-run.
Hernan Rincon (1998)
Colombia:
The role of exchange rate in trade behaviour for Colombia:197 9:1-1995:4
Multivariate
Cointegration approach
Exchange rates do play a role in determining the short-and-long run equilibrium behaviour of the Colombian trade balance. The data also supported the Bickerdike-Robinson-Metzler (BRM) or Marshall-Lerner (ML) conditions.
135
Table 5.13: Summary of Selected Findings (cont.)
Author Coverage Methodology Major Findings Ali, S. Z and
Anwar, S.
(2011)
Least Developed Countries
Small Open Economy Model with Firm Microeconomic Foundations.
Exchange rate affects net exports through changes in relative competitiveness.
Exchange rate affects interest rate parity that in turn affects the aggregate demand for goods and services through a change in real interest rate.
On the supply side, exchange rate depreciation had negative effect as domestic firm adjusted their prices in response to changes in the effective prices of foreign firms.
Depreciation of the nominal exchange rate results in depreciation of the real exchange rate. The channel reaction was that exchange rate depreciation, along with the real interest rate effect, contributed to a fall in output and an increase in prices. The Marshall-Lerner Condition and the form of exchange rate expectation played significant role.
136
Table 5.13: Summary of Selected Findings (cont.)
Author Coverage Methodology Major Findings Combes et al.,
(2011)
42
Developing countries (of which, 19 are Africa)
Dynamic panel cointegration techniques.
A contrary conclusion was reached, that real exchange rate appreciation stemmed from capital inflows. Of this, portfolio investment
commanded the highest effect which exceeded that of foreign direct investment by over 7 times.
Kodongo and Ojah (2011)
Selected African Countries, 1993-2009
Panel VAR techniques
Depreciation of exchange rate is significant in improving the balance of payments position especially in the short run.
Peter Rowland (2004)
Colombia, 1983-2002
Unrestricted VAR Model
The pass-through is incomplete.
Import prices is found to respond speedily to exchange rate changes with greater percentages passed onto prices of imports within a year.
Bleaney and Greenaway (1998)
Sub-Saharan Africa, 1980-1995
Panel Data Analysis
Real exchange rate instability negatively affects investment, hence the financial account balance.
Improvement occurs when over valuation of currencies are eradicated.
137
Table 5.13: Summary of Selected Findings (cont.)
Author Coverage Methodology Major Findings
Bolling, et al., (2007)
USA 1983-2002
Log-Log regression model
Exchange rate fluctuations discourage U.S. FDI in certain industries.
Gust, et al., (2009)
U.S.A. 2000-2008
Open-economy DSGE Model
An incomplete exchange rate pass-through to trade prices.
Cuyvers, et al., (2009)
Cambodia, 1995-2005
Panel Data The main determinants that statistically impact inward FDI include domestic GDP, bilateral trade, and the exchange rate depreciation.
Xing and Zhao (2006)
Japanese Economy, 1994-2005
Structural time series analysis
Appreciation of the Yen encouraged outflows of investment to neighbouring countries.
Halil Fidan (2006)
Turkey, 1970-2004
VAR Model The short-run- and-long-run effects of exchange rate on exports and imports are at variant.
Qureshi et al., (2011)
SSA, 1972-2006
Augumented Gravity Model
Direct pegs controlled exchange rate volatility, thus, positively impact trade.
138
Table 5.13: Summary of Selected Findings (cont.)
Author Coverage Methodology Major Findings Sekansti
(2010)
South Africa, 1995-2007
ARDL A negative impact of exchange rate volatility is evidenced on exports.
Masha et al., (2012)
Maldives, 1994-2010
VAR Even though the exchange rate pass-through is high but incomplete as theoretically expected.
Razafimahefa (2012)
SSA, 1985-2008
Panel Data Analysis
The pass-through is incomplete and is highly preceded by depreciation than appreciation of the various local currencies. The average elasticities is estimated to be less than 0.5 and common among countries with flexible exchange rate regimes and high income.
Arize and Nippani (2010)
Selected SSA, 1973-2005
Dynamic ECM While mixed elasticities are
obtained, real income and prices are statistically significant in
influencing demands for imports.
Marshall-Lerner Condition is satisfied.
Thorbecke (2011)
China, 1993-2006
DOLS Appreciation of exchange rate across East Asia negatively affects exports. While the effects of appreciation in China is negligible.
139
CHAPTER SIX
SUMMARY AND CONCLUSION
The conclusion of the research is organized into three sub sections. Summary of findings are presented in subsection one, lessons for policy in sub section two. While limitation of the research and area for future research are discussed in sub section three.