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University of Macau / Faculty of Social Sciences and Humanities / Department of Government and Public Administration

University of Macau / Faculty of Social Sciences and Humanities / Department of Government and Public Administration

M.Com. (Financial Economics) / The main objective of this mini dissertation is to examine the effect of exchange rate volatility on international trade. The finding of this mini dissertation is however that the impact of exchange rate volatility on international trade could be either positive or negative depending on various reasons that will be discussed when the arguments of the theorists that have either found a positive, negative and sometimes indeterminate effect of exchange rate volatility on international trade are discussed. The focus of this mini dissertation will be on the manufacturing trade between the Republic of South Africa with the United States and China. The need for an analysis of exchange rate volatility on international trade arises from the fact that firstly no consensus has been reached on the true effect of exchange rate volatility on international trade and secondly knowledge of what the true effect of exchange rate volatility is on international trade could assist in drafting the appropriate policies at government level. The finding of this mini dissertation represents a challenge for policy recommendations as it reflects the fact that various industries, sectors and subsectors of the economy of the Republic of South Africa are impacted differently by the volatility of the Rand/Yuan and Rand/Dollar exchange rates, respectively, therefore any policy that is drawn up to improve international trade needs to be done on an individual basis for each industry, sector and subsector respectively taking into account the various dynamics and characteristics of each. Firstly in the literature review a detailed discussion of both sides of the exchange rate volatility debate will be outlined. It would be shown why there is a lack of consensus when it comes to the issue of what effect exchange rate volatility has on international trade. On the one hand the argument of those suggest that exchange rate volatility hampers international trade or has a negative effect on international trade, such as Sekantsi, (2008); Onafowora and Owoye, (2008); Chit, (2010); Vergil, (2008); Arize et al, (2000); Arize and Malindretos, (2002); Klaasen, (2004) and Doganlar, (2002), will be reviewed. The argument of those that say that in fact exchange rate volatility has no impact on international trade, such as Raddatz, (2008); Frankel, (2007); Arize and Malindretos, (2002); Arize et al, (2000); Klaasen, (2004); Chowdhury, (1993) and Hassan and Sukar, (1999), will also be reviewed. This discussion and the results that arise from exploring this debate have very important implications on the recommendations that are passed on to government to be considered when drafting policies, such as the New Growth Path (NGP). Secondly when the background of the manufacturing industry in South Africa is discussed, all the initiatives and policies such as the NGP that government has planned and put in place in order to rejuvenate the manufacturing industry will be outlined. The impact of exchange rate volatility on international trade has a direct impact on these policies. Recommendations regarding how best enhance the policies to rejuvenate the manufacturing industry cannot be possibly made when consensus about the impact of exchange rate volatility has not be reached. For this reason it was it imperative that the true impact of exchange rate volatility on international trade be made clear.

The objective of this study is to evaluate the effects of macroeconomic policy variables on bilateral trade between the United States and Japan. An auto-regressive distributed lag model is developed to estimate the effects of government economic policies on four commodity groups: agriculture; materials and chemicals; machinery and transport equipment; and manufactured goods. Results indicate that monetary policy significantly affects U. S. and Japanese imports of manufactured goods and transport equipment. The results also show that changes in government expenditure have a significant long-run effect on U.S. imports of manufactured goods and Japanese imports of materials and chemicals, while the long-run effects of income and exchange rates are significant for most commodity groups.

Increasing globalization and transnational trends in business have resulted in greater contact with people from different cultures. However, in any cross-cultural encounter, miscommunication and misunderstandings are likely to occur. In a workplace setting, these can seriously undermine job performance and employee relations. The Intercultural Sensitizer is a cross-cultural training tool that is designed to increase the likelihood that trained individuals will make accurate interpretations concerning behavior observed in individuals from other cultural groups (Albert, 1983) . The purpose of this study was two-fold: (1) to identify cultural differences between Americans and Japanese that can lead to misunderstandings in the workplace and hinder communication, and (2) to construct an intercultural sensitizer that will enable the two cultural groups to interact more effectively with each other. The study's five-phase research design was based on Albert's (1983) delineation of the construction of an intercultural sensitizer. Twenty-four episodes were constructed and statistically analyzed to determine if there was a difference in the way the two cultural groups responded to a given situation. Nine episodes yielded critical values significant at the .05 level. The study concluded that there while there are differences in the cultural perspectives of American and Japanese business professionals, the two groups also share common cultural assumptions. The study's findings have numerous implications for cross-cultural corporate training and higher education.

Before 1965, Canadian automotive manufacturers were producing a wide variety of models for a limited market in an industry in which economies of scale are very important. Tariffs and a Canadian content requirement protected this high cost industry from being overwhelmed by the more efficient U.S. manufacturers. The efficiency of Canadian firms was expected to improve under the Auto Pact with the U.S., which allowed duty free passage of new automotive equipment subject to certain conditions designed to protect the weaker Canadian industry. The Auto Pact was prevented by these Canadian safeguards from being a true free trade agreement (FTA), but it was an important step towards reducing the barriers to bilateral automotive trade. / Master of Arts

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The Eisenhower Administration sought to create a large role for U.S. multinational corporations, who could provide a significant amount of the capital needed for trade expansion and industrial growth. This policy became known as "trade not aid." The trade not aid policy reflected both the fiscal conservatism and ideological beliefs of the Eisenhower Administration. By 1957 Eisenhower shifted to a policy of trade and aid. This study examines three foreign economic policies in the context of American-East Asian relations. It focused primarily on Japan, since that country served as the center of the American regional "workshop economy" concept in Asia. Tracing the development of the trade/aid program, this thesis then compares and contrasts governmental policies with business activity and opinion during the 1950s. It concludes that the foreign economic policy of the Eisenhower Administration contained serious flaws, served the needs of only a few countries in the region, and was weighted heavily toward a military support role rather than economic development. (Abstract shortened with permission of author.)

This paper presents a case study of developing foreign currency trading strategies for trading operations for a multi-million dollar company that sells analytical products and services to European countries. The analysis provides a general framework for managing currency risk exposures for U.S. Multinational companies.