The Impacts of Exchange Rate on Economic Growth in Cambodia

  • Long Vorlak School of Economics, Northeast Normal University, Changchun Jilin, China.
  • Ignatius Abasimi School of Economics, Northeast Normal University, Changchun Jilin, China.
  • Yang Fan School of Economics, Northeast Normal University, Changchun Jilin, China.

Abstract

This research paper assesses the impact of exchange rates on the economic growth of Cambodia's. The study used variables such as gross domestic product (GDP) indicating Cambodia's economic growth, as well as some explanatory variables such as exchange rate (EXR), broad money (M2), and openness to trade (TOP), rate of inflation (IFR) and foreign direct investment (FDI). The study used an ordinary least squares (OLS) regression model to estimate the effects of exchange rates on Cambodia's economic growth. The research data was downloaded from the World Bank database. According to estimates, the results show that the impact of exchange rate (EXR) and openness to trade (TOP) on GDP is 1%. Exchange rate is positively correlated with GDP, while trade openness is negatively correlated with GDP. During the period of study (1995-2017), other variables such as broad money (M2), inflation rate (IFR), and foreign direct investment (FDI) possess not significant effect on Cambodia's GDP.
Keywords: Economic growth, Exchange rate, OLS, Cambodia.
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How to Cite
Vorlak, L., Abasimi, I., & Fan, Y. (2019, November 11). The Impacts of Exchange Rate on Economic Growth in Cambodia. International Journal of Applied Economics, Finance and Accounting, 5(2), 78-83. https://doi.org/https://doi.org/10.33094/8.2017.2019.52.78.83
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