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Type :thesis
Subject :HG Finance
Main Author :Lubis, Muhammad Riyadh Ghozali
Title :Linkaging the indirect effects of exchange rate to economic growth and poverty through economic performance in developing countries
Place of Production :Tanjong Malim
Publisher :Fakulti Pengurusan dan Ekonomi
Year of Publication :2020
Notes :with cd
Corporate Name :Universiti Pendidikan Sultan Idris
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Abstract : Universiti Pendidikan Sultan Idris
This study examines the effects of exchange rate depreciation on economic performance, which  indirectly affects economic growth and poverty reduction in 11 developing countries by using annual  data during 1980-2016. Three methods of analysis, namely Autoregressive Distributed Lag (ARDL),  Fully Modified Ordinary Least Squares (FMOLS), and Panel Autoregressive Distributed Lag (P-ARDL)  applied for analysing eight models constructed. The nominal exchange rate is the main interest  variable in the economic performance model. Foreign direct investment, international reserve, and  trade balance are the main interest variables in the economic growth model and poverty reduction  model, respectively. By considering the incidence of the structural break, the results of  time-series analysis using the ARDL method shows that the nominal exchange rate contributes  positively to foreign direct investment in 7 countries. The results also show the nominal exchange  rate negatively affects international reserve in the short run, then has a positive effect in the  long-run in 5 countries. Other findings of the study prove that the nominal exchange rate improves  trade balance in the short-run, but it worsens trade balance in the long-run in 8 countries. Having  Cumulative Sum (CUSUM) and Cumulative Sum of Squares (CUSUMSQ) tests, the results show that the  structures of three models of economic performance are stable. The results of FMOLS show a negative  long-run relationship between gross domestic product and foreign direct investment as well as  international reserve, but a positive long-run relationship between gross domestic product and  trade balance. The results of P-ARDL show that per capita income is influenced positively by  foreign direct investment, international reserve, trade balance, and remittance. This study calls  for a rethinking of the importance of foreign direct investment and international reserve in  boosting economic growth. The developing countries should rethink the negative-sides incurred for  economic growth rather than pursuing foreign direct investment and hoarding international reserves.  

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