An Empirical Analysis of Optical Products Export in Taiwan
Date Issued
2016
Date
2016
Author(s)
Li, Lih-Woei
Abstract
Over the past decade, the optical products industry is growing fast, whcih makes a great contribution to economic development and foreign exchange earnings in Taiwan. In 2015, total export of Taiwan reached to $28.53 billion, and the trade surplus amounted to $4.81 billion; the trade surplus of the optical product is $5.4 billion in 2015 and the optical industry is the fourth largest trade surplus industry in Taiwan. It shows Taiwan''s optical industry is highly export-oriented. So, the optical product export is an important indicator to evaluate the development of textile industry in Taiwan. To figure out the factors for Taiwan''s optical product export, we select exchange rate, optical product import, overseas production ratio, the export & import price index, and composite leading indicators of the G7 & Mainland China economy as explanatory variables. From January 2002 to January 2016, there are 169 observations. First, we use unit root test to ensure all the series used in regression analysis are stationary. Then, we create the vector autoregression(VAR) model to analyze how explanatory variables affect textiles export and use impulse response function to figure out the response of textiles export to the exogenous shock of another variables. Granger causality test is also used to determine whether a time series is useful in forecasting another. Eventually, we use the statistically significant variables in multiple regression analysis to investigate the impact factors for textiles export. The conclusion of this research shows that the Taiwan''s optical product export is affected by “one lag of itself”, “fourth lag of USD against the New Taiwan Dollar exchange rate”, “second & fourth lags of optical product import”, “first lag of the composite leading indicators of G7”, “second lag of the composite leading indicators of Mailand China”, and “first lag of export price index”.
Subjects
optical product
export
price index
exchange rate
leading indicator
SDGs
Type
thesis
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