The exchange rate as a determinant of the development of foreign trade in the agri-food industry in the Visegrad region
The exchange rate as a determinant of the development of foreign trade in the agri-food industry in the Visegrad region

Summary/Abstract: The majority of empirical studies assume the symmetric effects of exchangerate development on the trade balance. However, we followmore recent studies to show that there are distinctions to be madebetween the directions of changes inthe exchange rate. In this study,we assume that the effects can be asymmetrical in certain branchesof the agri-food industry. This paper aims to evaluate the asymmetriceffects of the exchange rate on foreign trade in the agri-food sector inthe Visegrad region. For this purpose, we employ a non-linear auto-regressivedistributed lag approach to incorporate the assumed asymmetriesof exchange rate changes in a model of the J-curve patternin the case of Czechia, Hungary, and Poland.The dataset on the SITCtwo-digit level covers the period between 2000 and 2018. The papershows that there is a clear difference in the effects of appreciation anddepreciation. The difference is not only in the direction, but also in theintensity, of the effects of exchange rate changes on the trade balancesof food and live animals, dairy products and birds’ eggs, andanimal oils and fats in Czechia; meat and preparations in Hungary;sugar, sugar preparations and honey and beverages in Poland.

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