EXCHANGE RATE VOLATILITY AND INTERNATIONAL TRADE IN POLAND - APPLICATION OF AUGMENTED GRAVITY MODEL

Abstract

This paper applies the gravity model to Poland´s international trade with aim to assess the impact of exchange rate uncertainty of Polish zloty on the trade flows with its main trading partners. The basic gravity model shows trade volume between a pair of countries as an increasing function of their sizes (GDP) and a decreasing function of the distance between them. Additional factors included in the extended model are: population, common border and exchange rate volatility. The measure of exchange rate volatility is estimated by GARCH model. The analysis is provided by using quarterly data over the period 1999:1 – 2014:3. The analysis uses panel data regression for 10 sectors of Poland´s international trade based on SITC classification and six major trading partners (Czech Republic, Germany, France, Great Britain, Italy and Slovakia). The significant parameters obtained from panel regression demonstrate that bilateral exchange rate volatility leads to a decrease in Poland´s total trade. The same direction of relationship was confirmed for food and live animal, beverages and tobacco, crude materials, chemicals, manufactured goods, machinery and transport equipment and miscellaneous manufactured articles.

Authors and Affiliations

Daniel Stavarek, Julia Simakova

Keywords

Related Articles

Serious Violation of Workers’ Rights in a Situation when Employees Refrain from Work due to Employer’s Failure to Provide Safe and Hygienic Working Conditions

The paper examines a situation in which an employee is entitled to terminate the contract of employment without prior notice. The case under examination occurs when the employer commits a serious violation of workers’ ri...

APPLICATION OF BLUME METHOD IN FORECASTING RISK ON THE EXAMPLE OF PUBLIC COMPANIES LISTED ON WIG20

The paper presents the results of studies on the use of Blume’s beta to identify systematic risk of companies listed on the Warsaw Stock Exchange. For this purpose, beta values for WIG20 companies for 2014-2016 were calc...

16 YEARS OF THE EURO AREA – INCREASE OF GDP AND PAYMENT BALANCE (PRELIMINARY DATA ANALYSIS)

The paper makes an attempt at description of the impact of monetary integration on the most important macroeconomic indicators of the Euro area against the background of those countries which retained their national curr...

Military Occupation and Human Rights Protection

The aim of the paper is to generally outline the relationship between the law of armed conflict and human rights protection, and thus the usability of the human rights standards in the military occupation. The paper prov...

ODPOWIEDZIALNOŚĆ INTERNAUTÓW ORAZ DOSTAWCÓW DANYCH W KONTEKŚCIE REFORM EUROPEJSKIEGO PRAWA O OCHRONIE DANYCH

25 stycznia 2012 roku Komisja Europejska zainicjowała proces reform unijnych przepisów ochrony danych osobowych motywowany ogromnym wpływem na ludzką egzystencję technologii teleinformatycznych, w szczególności Internetu...

Download PDF file
  • EP ID EP194247
  • DOI -
  • Views 91
  • Downloads 0

How To Cite

Daniel Stavarek, Julia Simakova (2015). EXCHANGE RATE VOLATILITY AND INTERNATIONAL TRADE IN POLAND - APPLICATION OF AUGMENTED GRAVITY MODEL. Zeszyty Naukowe Wyższej Szkoły Finansów i Prawa w Bielsku-Białej, 1(3), 37-49. https://www.europub.co.uk/articles/-A-194247