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Food imports and exchange rate: the application of dynamic cointegration framework


Aliyu, Alhaji Jibrilla and Ismail, Normaz Wana (2017) Food imports and exchange rate: the application of dynamic cointegration framework. Malaysian Journal of Mathematical Sciences, 11 (spec. Feb.). pp. 101-114. ISSN 1823-8343; ESSN: 2289-750X

Abstract / Synopsis

This paper studies how exchange rate policy influences households’ consumption styles represented by food imports. We provide an empirical analysis based on the Malaysian annual data from 1980-2012. An autoregressive distributed lag model (ARDL) was utilized in interpreting long-run elasticities of food import demand as a cointegrating relation, and short-run dynamics was interpreted using ECM based on cointegrating regression of the ARDL technique. The robustness of ARDL results are verified using Dynamic OLS (DOLS) estimation technique. Our results, while providing evidence that food import demand in the country is fairly inelastic to both income growth and relative prices of food imports, also raise some important policy issues, particularly on the competitiveness of the country’s agricultural and food exports.

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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
Institute of Agricultural and Food Policy Studies
Publisher: Institute for Mathematical Research, Universiti Putra Malaysia
Notes: Special issue: Conference on Agriculture Statistics 2015 (CAS 2015)
Keywords: Food import demand; Consumption pattern; ARDL; DOLS; ECM
Depositing User: Nabilah Mustapa
Date Deposited: 27 Apr 2017 17:55
Last Modified: 27 Apr 2017 17:55
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