The South Korea–China trade and the bilateral real exchange rate: Asymmetric evidence from 33 industries

Abstract

The present article contributes to the existing literature by applying the NARDL approach of Shin et al. (2014) to investigate the asymmetric impacts of exchange rates on the bilateral exports and imports of 33 industries between South Korea and China. We demonstrate that there is evidence that fluctuations of the real South Korean won (KRW) to Chinese yuan (CNY) exchange rate have asymmetric impacts on some, though not all, types of South Korea’s exporting and importing industries in both the long- and short-run. Additionally, the asymmetric impacts appear to be an industrial-specific phenomenon.