What the study found
The study found that an S-curve pattern in exchange rate and trade balance relationships appeared in only three of fifteen industries involved in trade between Pakistan and Japan. The authors report that exchange rate depreciation was not favorable to improving Pakistan's trade balance in this bilateral trade.
Why the authors say this matters
The authors suggest that looking at industries separately can give deeper insight into trade dynamics than aggregate-level analysis. They also conclude that policymakers should focus on other factors, such as product diversification, innovation, and trade facilitation, to expand trade balance.
What the researchers tested
The researchers examined fifteen 2-digit industries in Pakistan-Japan trade and attempted to empirically determine whether the S-curve phenomenon appeared at the industry level. They used the cross-correlation function, which they describe as showing a possible positive correlation between future trade balance and the current exchange rate, and a negative correlation between past trade balance and the current exchange rate.
What worked and what didn't
The S-curve pattern was exhibited in only three industries out of fifteen. The evidence indicates that exchange rate depreciation did not improve Pakistan's trade balance with Japan. The abstract does not report which specific industries showed the pattern.
What to keep in mind
The summary available here does not describe the full data period, detailed industry-level results, or additional limitations. The findings are limited to Pakistan-Japan trade and to the fifteen 2-digit industries studied.
Key points
- An S-curve pattern appeared in only 3 of 15 industries in Pakistan-Japan trade.
- The authors report that exchange rate depreciation was not favorable for improving Pakistan's trade balance with Japan.
- The study used cross-correlation functions to test for industry-level S-curve patterns.
- The authors suggest policymakers should consider diversification, innovation, and trade facilitation.
Disclosure
- Research title:
- Exchange rate shifts affected only three of fifteen industries
- Authors:
- Riaz Ahmad, Sareer Ahmad, Mahnoor Anjum, Hong Mi, Zhainagul Abdirasulova
- Institutions:
- Qilu University of Technology, Osh State University, Quaid-i-Azam University, Northeast Forestry University
- Publication date:
- 2026-03-05
- OpenAlex record:
- View
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