, Volume 40, Issue 4, pp 685–719 | Cite as

Exchange-rate variability and U.S.-French trade flows: evidence from industry data

  • Mohsen Bahmani-Oskooee
  • Hanafiah Harvey
  • Scott W. Hegerty
Original Paper


Recent studies have greatly expanded the literature on the effects of exchange-rate volatility on industry-level bilateral trade flows. In this study, we examine the case of the United States and France, applying cointegration analysis to a set of 146 U.S. export and 115 U.S. import industries. We find that the majority of industries show little or no relationship between risk and trade volumes, but that small industries—particularly for exports—show more sensitivity than do large ones. A disproportionate share of industries respond positively to increased volatility, particularly among U.S. importers, suggesting the presence of “risk loving” behavior.


Exchange rate volatility Industry data France United States Bounds testing 

JEL Classification



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Copyright information

© Springer Science+Business Media New York 2012

Authors and Affiliations

  • Mohsen Bahmani-Oskooee
    • 1
  • Hanafiah Harvey
    • 2
  • Scott W. Hegerty
    • 3
  1. 1.Center for Research on International EconomicsUniversity of Wisconsin-MilwaukeeMilwaukeeUSA
  2. 2.Department of EconomicsPenn State UniversityMont AltoUSA
  3. 3.Department of EconomicsNortheastern Illinois UniversityChicagoUSA

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