Productivity Bias Hypothesis: New Evidence from Parallel Market Exchange Rate
| Autor: | Folorunsho M. Ajide, James Temitope Dada, Philip Akanni Olomola |
|---|---|
| Rok vydání: | 2020 |
| Předmět: |
050208 finance
HF5001-6182 Lag 05 social sciences Federal Reserve Economic Data Grey market General Medicine parallel market exchange rate purchasing power parity Exchange rate Purchasing power parity Unit root test productivity differentials 0502 economics and business Value (economics) productivity bias hypothesis Econometrics Economics Business 050207 economics black market exchange rate Productivity c22 e31 f30 |
| Zdroj: | ECONOMICS, Vol 8, Iss 1, Pp 31-40 (2020) |
| ISSN: | 2303-5013 |
| Popis: | Aim/Purpose: The purpose of this study is to investigate Productivity Bias Hypothesis (PBH) in Nigeria using parallel (black) market exchange rate. Design/Methodology/Approach: The study focused on Naira-Dollar (N/$) parallel market exchange rate. Quarterly data from 1995 to 2018 were used. Data on domestic productivity and parallel market exchange rate were sourced from Central Bank of Nigeria (CBN) statistical bulletin, 2018 edition. US productivity data was sourced from Federal Reserve Economic Data. Autoregressive Distributed Lag (ARDL) was used as the estimation technique. Findings: The result reveals that parallel (black) market exchange rate support the presence of productivity bias hypothesis in Nigeria. Furthermore, the purchasing power parity hypothesis was rejected using the conventional unit root test. This implies that using official exchange rate, the study rejects the productivity bias hypothesis. Research Implications/Limitations: The implication of the study is that exchange rate in Nigeria should be determined freely in the foreign exchange market. Originality/Value/Contribution: Previous studies have used official exchange rate to test the validity of the productivity bias hypothesis, and the results can be basically described as mixed. Hence, this study differs from extant studies as it examined productivity bias hypothesis using parallel market exchange rate. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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