Agriculture exports performance in Malaysia / Zubir Azhar, Noor Zahirah Mohd Sidek

This paper examines the impact of exchange rate risk on the agriculture exports in the era of recurring financial crises and global economic instability. Exchange rate risk is captured by misalignments in the real bilateral US-RM exchange rate. This paper is divided into two parts. First, the incide...

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Main Authors:	Azhar, Zubir, Mohd Sidek, Noor Zahirah
Format:	Research Reports
Language:	English
Published:	Institute of Research Management & Innovation (IRMI) 2010
Subjects:	Agriculture Agricultural industries
Online Access:	http://ir.uitm.edu.my/id/eprint/19542/ http://ir.uitm.edu.my/id/eprint/19542/1/LP_ZUBIR%20AZHAR%20IRMI%20K%2010_5.pdf

id	uitm-19542
recordtype	eprints
spelling	uitm-195422019-02-04T08:53:40Z http://ir.uitm.edu.my/id/eprint/19542/ Agriculture exports performance in Malaysia / Zubir Azhar, Noor Zahirah Mohd Sidek Azhar, Zubir Mohd Sidek, Noor Zahirah Agriculture Agricultural industries This paper examines the impact of exchange rate risk on the agriculture exports in the era of recurring financial crises and global economic instability. Exchange rate risk is captured by misalignments in the real bilateral US-RM exchange rate. This paper is divided into two parts. First, the incidence of exchange rate misalignment is observed using price-based approach (purchasing power parity) and model-based approach (behavioural equilibrium exchange rate). Then, the estimated exchange rate misalignment is used as a variable in the export model to capture the impact of risks. In addition, the estimated misalignments are segregated into events of overvaluation and undervaluation to further comprehend their individual impact. Results suggest that in the long run, overvaluation has a significant negative impact on palm oil exports. The opposite however, could not be construed in the case of undervaluation which suggests asymmetries in the impact of over- and undervaluation of the exchange rate. Other agriculture exports do not exhibit significant long run relationship with exchange rate misalignment. In summary, it is imperative that policy-makers avoid both over- and under-valuation and keep the real exchange rate in line with the economic fundamentals especially in the case of palm oil exports. Institute of Research Management & Innovation (IRMI) 2010-09 Research Reports NonPeerReviewed text en http://ir.uitm.edu.my/id/eprint/19542/1/LP_ZUBIR%20AZHAR%20IRMI%20K%2010_5.pdf Azhar, Zubir and Mohd Sidek, Noor Zahirah (2010) Agriculture exports performance in Malaysia / Zubir Azhar, Noor Zahirah Mohd Sidek. [Research Reports] (Unpublished)
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Teknologi MARA
building	UiTM Institutional Repository
collection	Online Access
language	English
topic	Agriculture Agricultural industries
spellingShingle	Agriculture Agricultural industries Azhar, Zubir Mohd Sidek, Noor Zahirah Agriculture exports performance in Malaysia / Zubir Azhar, Noor Zahirah Mohd Sidek
description	This paper examines the impact of exchange rate risk on the agriculture exports in the era of recurring financial crises and global economic instability. Exchange rate risk is captured by misalignments in the real bilateral US-RM exchange rate. This paper is divided into two parts. First, the incidence of exchange rate misalignment is observed using price-based approach (purchasing power parity) and model-based approach (behavioural equilibrium exchange rate). Then, the estimated exchange rate misalignment is used as a variable in the export model to capture the impact of risks. In addition, the estimated misalignments are segregated into events of overvaluation and undervaluation to further comprehend their individual impact. Results suggest that in the long run, overvaluation has a significant negative impact on palm oil exports. The opposite however, could not be construed in the case of undervaluation which suggests asymmetries in the impact of over- and undervaluation of the exchange rate. Other agriculture exports do not exhibit significant long run relationship with exchange rate misalignment. In summary, it is imperative that policy-makers avoid both over- and under-valuation and keep the real exchange rate in line with the economic fundamentals especially in the case of palm oil exports.
format	Research Reports
author	Azhar, Zubir Mohd Sidek, Noor Zahirah
author_facet	Azhar, Zubir Mohd Sidek, Noor Zahirah
author_sort	Azhar, Zubir
title	Agriculture exports performance in Malaysia / Zubir Azhar, Noor Zahirah Mohd Sidek
title_short	Agriculture exports performance in Malaysia / Zubir Azhar, Noor Zahirah Mohd Sidek
title_full	Agriculture exports performance in Malaysia / Zubir Azhar, Noor Zahirah Mohd Sidek
title_fullStr	Agriculture exports performance in Malaysia / Zubir Azhar, Noor Zahirah Mohd Sidek
title_full_unstemmed	Agriculture exports performance in Malaysia / Zubir Azhar, Noor Zahirah Mohd Sidek
title_sort	agriculture exports performance in malaysia / zubir azhar, noor zahirah mohd sidek
publisher	Institute of Research Management & Innovation (IRMI)
publishDate	2010
url	http://ir.uitm.edu.my/id/eprint/19542/ http://ir.uitm.edu.my/id/eprint/19542/1/LP_ZUBIR%20AZHAR%20IRMI%20K%2010_5.pdf
first_indexed	2023-09-18T23:02:47Z
last_indexed	2023-09-18T23:02:47Z
_version_	1777418284736446464

Agriculture exports performance in Malaysia / Zubir Azhar, Noor Zahirah Mohd Sidek

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