Volume 44, Number 175,
October-December 2013
Would a more flexible exchange rate improve competitiveness?
Guadalupe Mántey
A MODEL TO MEASURE THE FINANCIAL EFFECTS OF DEVALUATION ON EXPORTS IN DEVELOPING ECONOMIES ( ...continuation )

All series used were stationary. The models were estimated using the ordinary least squares method and cross-section sur weights. Table 1 summarizes the most relevant findings of this exercise.

It was observed that for the five models selected, all proxy variables included were highly significant and the statistical and diagnostic tests were satisfactory.

For all specifications, the devaluation rate, either real or nominal, had a negative sign and the coefficients in both cases were stable.

As expected, the real growth of the global economy with a lag, measured by the real global gdp index or through global exports, had a positive sign.

Similarly, the growth of global financial markets, measured only through cross-border bank credits or by adding the placement of international bonds, showed the expected positive sign.

The fourth variable, leverage of the current account (finacbcomimp), considered as an indicator of the country risk and the likely behavior of the real exchange rate in the future, also had the expected negative sign.

The most relevant conclusion of this research is that currency devaluation in a developing country, due to its negative impact on the balance sheets of economic agents, impairs the solvency of companies and banks, preventing companies with export potential from taking advantage of the gains in competitiveness that could be produced by currency adjustments. This effect is not observed in developed countries, with can obtain foreign debt in their own currencies.





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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 48, Number 191, October-December 2017 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
CP 04510, México, D.F. Tel (52 55) 56 23 01 05 and (52 55) 56 24 23 39, fax (52 55) 56 23 00 97, www.probdes.iiec.unam.mx, revprode@unam.mx. Journal Editor: Alicia Girón González. Reservation of rights to exclusive use of the title: 04-2012-070613560300-203, ISSN: pending. Person responsible for the latest update of this issue: Minerva García, Circuito Maestro Mario de la Cueva s/n, Ciudad Universitaria, Coyoacán, CP 04510, México D.F., latest update: Nov 13th, 2017.
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The online journal Problemas del Desarrollo. Revista Latinoamericana de Economía corresponds to the printed edition of the same title with ISSN 0301-7036