Publication:
Innocent Bystanders : How Foreign Uncertainty Shocks Harm Exporters

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dc.contributor.authorZavacka, Veronika
dc.contributor.authorTaglioni, Daria
dc.date.accessioned2013-01-03T17:49:40Z
dc.date.available2013-01-03T17:49:40Z
dc.date.issued2012-10
dc.description.abstractThe failure of trade economists to anticipate the extreme drop in trade post Lehman Brothers bankruptcy suggests that the behavior of trade in exceptional circumstances may still be poorly understood. This paper explores whether uncertainty shocks have explanatory power for movements in trade. VAR estimations on United States data suggest that domestic uncertainty is a strong predictor of movements in imports, but has little effect on exports. Guided by these results, the paper estimates a bilateral model with focus on the impact of importer uncertainty on foreign suppliers. It finds that there is a strong negative relationship between uncertainty and trade and that this relationship is non-linear. Uncertainty matters most when its levels are exceptionally high. The paper does not find evidence of learning from past turmoils, suggesting that prior experience with major uncertainty shocks does not reduce the effect on trade. In line with the expectations, the negative effect of uncertainty shocks on trade is higher for trade relationships more intensive in durable goods. Surprisingly, however, the effect of durability is non-linear. Supply chain considerations or the possibility that the relationships with the highest durability lead to important compositional effects may have a bearing on the results. The results are robust to excluding the post Lehman shock, suggesting that the trade response during the 2008-2009 crisis has been similar to past uncertainty events.en
dc.identifierhttp://documents.worldbank.org/curated/en/2012/10/16829842/innocent-bystanders-foreign-uncertainty-shocks-harm-exporters
dc.identifier.doi10.1596/1813-9450-6226
dc.identifier.urihttps://hdl.handle.net/10986/12063
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper; No. 6226
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCOUNTING
dc.subjectADJUSTMENT COST
dc.subjectADJUSTMENT COSTS
dc.subjectADJUSTMENT MECHANISM
dc.subjectADVANCED COUNTRIES
dc.subjectADVERSE EFFECT
dc.subjectADVERSE IMPACT
dc.subjectAGGREGATE CONSUMPTION
dc.subjectAGGREGATE DEMAND
dc.subjectASSET PRICING
dc.subjectAUTOREGRESSION
dc.subjectBALANCE SHEET
dc.subjectBALANCE SHEETS
dc.subjectBANKING CRISES
dc.subjectBANKRUPTCY
dc.subjectBILATERAL EXCHANGE RATE
dc.subjectBILATERAL EXCHANGE RATES
dc.subjectBILATERAL TRADE
dc.subjectBILATERAL TRADE DATA
dc.subjectBUSINESS CYCLE
dc.subjectCAPITAL GOODS
dc.subjectCAPITAL INVESTMENT
dc.subjectCOMMON CURRENCY
dc.subjectCOMPETITIVENESS
dc.subjectCONSUMER DURABLES
dc.subjectCONSUMER EXPENDITURE
dc.subjectCONSUMER EXPENDITURES
dc.subjectCONSUMER PRICE
dc.subjectCONSUMER PRICE INDEX
dc.subjectCONSUMER SPENDING
dc.subjectCONSUMERS
dc.subjectCONSUMPTION DECISIONS
dc.subjectCONSUMPTION EXPENDITURE
dc.subjectCONSUMPTION EXPENDITURES
dc.subjectCONSUMPTION GOODS
dc.subjectCONTROL VARIABLES
dc.subjectCOST OF FINANCE
dc.subjectCOUNTRY OF ORIGIN
dc.subjectCREDIT CONSTRAINTS
dc.subjectCREDIT INTERMEDIATION
dc.subjectDATA AVAILABILITY
dc.subjectDEBT
dc.subjectDEBT CRISIS
dc.subjectDEPENDENT VARIABLE
dc.subjectDEPRECIATION
dc.subjectDEPRESSION
dc.subjectDERIVATIVES
dc.subjectDEVELOPING COUNTRIES
dc.subjectDEVELOPMENT POLICY
dc.subjectDISCOUNTED VALUE
dc.subjectDISPOSABLE INCOME
dc.subjectDOMESTIC DEMAND
dc.subjectDOMESTIC MARKET
dc.subjectDOMESTIC PRICES
dc.subjectDUMMY VARIABLE
dc.subjectDUMMY VARIABLES
dc.subjectDURABLE
dc.subjectDURABLE GOODS
dc.subjectECONOMIC CRISIS
dc.subjectECONOMIC EFFECT
dc.subjectECONOMIC ENVIRONMENT
dc.subjectECONOMIC HISTORY
dc.subjectECONOMIC POLICY
dc.subjectECONOMIC RESEARCH
dc.subjectECONOMIC SHOCK
dc.subjectEFFECTIVE EXCHANGE RATE
dc.subjectELASTICITY
dc.subjectEMERGING MARKETS
dc.subjectEXCHANGE RATE
dc.subjectEXCHANGE RATE VOLATILITY
dc.subjectEXCHANGE RATES
dc.subjectEXPENDITURE FUNCTION
dc.subjectEXPORT COMPETITIVENESS
dc.subjectEXPORTER
dc.subjectEXPORTERS
dc.subjectEXPORTS
dc.subjectFEDERAL RESERVE
dc.subjectFINANCIAL ASSETS
dc.subjectFINANCIAL CONSTRAINTS
dc.subjectFINANCIAL CRISES
dc.subjectFINANCIAL CRISIS
dc.subjectFINANCIAL DERIVATIVES
dc.subjectFINANCIAL MARKET
dc.subjectFINANCIAL MARKETS
dc.subjectFIXED EFFECTS
dc.subjectFORECASTING MODELS
dc.subjectFOREIGN BANKS
dc.subjectFOREIGN MARKETS
dc.subjectFUTURE PRICES
dc.subjectGDP
dc.subjectGLOBALIZATION
dc.subjectGRAVITY MODELS
dc.subjectIMPLIED VOLATILITY
dc.subjectIMPORT
dc.subjectIMPORT PRICES
dc.subjectIMPORTS
dc.subjectINCOME
dc.subjectINCOME EFFECT
dc.subjectINCOME SHOCKS
dc.subjectINCOME STREAM
dc.subjectINCOMES
dc.subjectINCREASING RETURNS
dc.subjectINSURANCE
dc.subjectINTEREST RATES
dc.subjectINTERNATIONAL BANK
dc.subjectINTERNATIONAL ECONOMICS
dc.subjectINTERNATIONAL FINANCIAL STATISTICS
dc.subjectINTERNATIONAL TRADE
dc.subjectINVENTORIES
dc.subjectINVENTORY
dc.subjectINVESTMENT DECISIONS
dc.subjectINVESTMENT GOODS
dc.subjectINVESTMENT PROJECTS
dc.subjectINVESTMENT SPENDING
dc.subjectITC
dc.subjectLACK OF CONFIDENCE
dc.subjectLIQUIDITY
dc.subjectLIQUIDITY CONSTRAINTS
dc.subjectMACROECONOMIC CONDITIONS
dc.subjectMACROECONOMIC VARIABLES
dc.subjectMACROECONOMICS
dc.subjectMARGINAL COST
dc.subjectMARKET ACCESS
dc.subjectMARKET ANALYSIS
dc.subjectMARKET LEVELS
dc.subjectMARKET RATE
dc.subjectMONETARY ECONOMICS
dc.subjectMONETARY FUND
dc.subjectMONETARY POLICY
dc.subjectMONEY MARKET
dc.subjectMONEY MARKET RATE
dc.subjectMONEY MARKETS
dc.subjectNOMINAL EXCHANGE RATE
dc.subjectOPTIMAL PORTFOLIO
dc.subjectOPTIMIZATION
dc.subjectOUTPUT
dc.subjectPERISHABLE GOODS
dc.subjectPERMANENT INCOME
dc.subjectPOLITICAL ECONOMY
dc.subjectPORTFOLIO
dc.subjectPORTFOLIO CHOICE
dc.subjectPOVERTY REDUCTION
dc.subjectRATE OF INVESTMENT
dc.subjectREAL EFFECTIVE EXCHANGE RATE
dc.subjectREAL EXCHANGE RATE
dc.subjectRECESSION
dc.subjectRELATIVE PRICE
dc.subjectRELATIVE PRICES
dc.subjectRETURN
dc.subjectSALES
dc.subjectSAVINGS
dc.subjectSHORTFALL
dc.subjectSIDE EFFECTS
dc.subjectSOVEREIGN DEBT
dc.subjectSPEED OF ADJUSTMENT
dc.subjectSPREAD
dc.subjectSTANDARD DEVIATION
dc.subjectSTANDARD DEVIATIONS
dc.subjectSTOCK MARKET
dc.subjectSTOCK MARKET CRASHES
dc.subjectSTOCK MARKET INDEX
dc.subjectSTOCK MARKET VOLATILITY
dc.subjectSTOCK PRICES
dc.subjectSTOCKS
dc.subjectSUBSTITUTION
dc.subjectSUBSTITUTION EFFECT
dc.subjectSUNK COSTS
dc.subjectSUPPLIERS
dc.subjectSUPPLY CHAIN
dc.subjectSUPPLY CHAINS
dc.subjectTOTAL EXPORTS
dc.subjectTOTAL IMPORTS
dc.subjectTRADE EQUATIONS
dc.subjectTRADE STATISTICS
dc.subjectTRADING
dc.subjectTRADING PARTNER
dc.subjectTRADING PARTNERS
dc.subjectTRANSACTION
dc.subjectTRANSACTION COSTS
dc.subjectTRANSITORY INCOME
dc.subjectTREASURY
dc.subjectTREASURY BILL
dc.subjectTREASURY BILL RATE
dc.subjectUNCERTAINTY
dc.subjectUNEMPLOYMENT
dc.subjectWEALTH
dc.subjectWEALTH EFFECT
dc.subjectWEALTH EFFECTS
dc.subjectWORLD TRADE
dc.titleInnocent Bystanders : How Foreign Uncertainty Shocks Harm Exportersen
dspace.entity.typePublication
okr.crossref.titleInnocent Bystanders: How Foreign Uncertainty Shocks Harm Exporters
okr.date.disclosure2012-10-01
okr.date.doiregistration2025-04-10T12:14:54.953216Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2012/10/16829842/innocent-bystanders-foreign-uncertainty-shocks-harm-exporters
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeFinance and Markets
okr.globalpracticeFinance and Markets
okr.globalpracticeTrade and Competitiveness
okr.guid100071468155982298
okr.identifier.doi10.1596/1813-9450-6226
okr.identifier.externaldocumentum000158349_20121015093042
okr.identifier.internaldocumentum16829842
okr.identifier.reportWPS6226
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/10/15/000158349_20121015093042/Rendered/PDF/wps6226.pdfen
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicEconomic Theory and Research
okr.topicFinance and Financial Sector Development::Currencies and Exchange Rates
okr.topicMacroeconomics and Economic Growth::Markets and Market Access
okr.topicPrivate Sector Development::Emerging Markets
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isAuthorOfPublicationef13906b-18b9-5962-8425-18d99f82c093
relation.isAuthorOfPublication.latestForDiscoveryef13906b-18b9-5962-8425-18d99f82c093
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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