The Effect of Oil Price on China's Exports
João Ricardo Faria
(1)
,
André Varella Mollick
(2)
,
Pedro Albuquerque
(3, 4)
,
Miguel A. León-Ledesma
(5)
Pedro Albuquerque
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Résumé
The increase in oil prices in recent years has occurred concurrently with a rapid expansion of Chinese exports in the world markets, despite China being an oil importing country. In this paper we develop a theoretical model that explains the positive correlation between Chinese exports and the oil price. The model shows that Chinese growth can lead to an increase in oil prices that has a stronger impact on its export competitors. This is due to the large labor force surplus of China. We then examine this hypothesis by estimating a reduced form equation for Chinese exports using Rodrik (2006)'s measure of export competitiveness, together with the oil price, productivity, real exchange rate, and foreign industrial production over the monthly 1992-2005 period. The results suggest a stable relationship and yields slightly positive values for the price of oil and elastic coefficients for export competitiveness, along with the expected negative elasticity for the real exchange rate.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Titre |
en
The Effect of Oil Price on China's Exports
|
Résumé |
en
The increase in oil prices in recent years has occurred concurrently with a rapid expansion of Chinese exports in the world markets, despite China being an oil importing country. In this paper we develop a theoretical model that explains the positive correlation between Chinese exports and the oil price. The model shows that Chinese growth can lead to an increase in oil prices that has a stronger impact on its export competitors. This is due to the large labor force surplus of China. We then examine this hypothesis by estimating a reduced form equation for Chinese exports using Rodrik (2006)'s measure of export competitiveness, together with the oil price, productivity, real exchange rate, and foreign industrial production over the monthly 1992-2005 period. The results suggest a stable relationship and yields slightly positive values for the price of oil and elastic coefficients for export competitiveness, along with the expected negative elasticity for the real exchange rate.
|
Auteur(s) |
João Ricardo Faria
1
, André Varella Mollick
2
, Pedro Albuquerque
3, 4
, Miguel A. León-Ledesma
5
1
IPED -
Institute for Policy and Economic Development
( 89921 )
- University of Texas-El Paso
- États-Unis
2
CoBA -
College of Business Administration
( 205991 )
- 1201 W University Dr. Edinburg, TX 78539
- États-Unis
3
Euromed Marseille - École de management
( 153634 )
- Rue Antoine Bourdelle - Domaine de Luminy - BP 921 - 3288 Marseille Cedex 9
- France
4
DEFI -
Centre de recherche en développement économique et finance internationale
( 174640 )
- 14 Avenue Jules Ferry, 13621 Aix en Provence Cedex
- France
5
School of Economics
( 205993 )
- Keynes College University of Kent Canterbury, Kent, CT2 7NP
- Royaume-Uni
|
Date de production/écriture |
2009
|
Audience |
Internationale
|
Date de publication |
2009-12
|
Volume |
20
|
Numéro |
4
|
Page/Identifiant |
793-805
|
Comité de lecture |
Oui
|
Vulgarisation |
Non
|
Langue du document |
Anglais
|
Nom de la revue |
|
Mots-clés (JEL) |
|
Domaine(s) |
|
Mots-clés |
en
Oil prices, Competitiveness, Exports, Productivity, ARDL model
|
DOI | 10.1016/j.chieco.2009.04.003 |
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