<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The aim of the article is to identify determinants of export of road vehicles from Slovakia to the United Kingdom. The Error correction model is based on monthly data from January 2008 to November 2018. The modelling identifies short and long-run effects of real effective exchange rate, inflation rate and industrial production on foreign demand of transport equipment. The real effective exchange rate indicates competitiveness of domestic producers towards most important trade partners, inflation rate of Slovakia is a proxy for macroeconomic environment and industrial production of the UK stands in for the income variable. The results suggest that export of road vehicles is in the long-run impacted by exchange rate and industrial production. The appreciation of exchange rate reduces export from SR to the UK while rising income increases foreign demand. In the short-run trading with motor vehicles is impacted by all three explanatory variables. The Error correction term indicates that roughly 30 % of disequilibrium in the previous month will be corrected in the current month. The implications are for governing bodies to manage the current commodity framework which is at present mainly oriented on machinery and transport equipment and to support companies from other industries aiming to create more diversified export commodity structure.</p></abstract>

The aim of the article is to identify determinants of export of road vehicles from Slovakia to the United Kingdom. The Error correction model is based on monthly data from January 2008 to November 2018. The modelling identifies short and long-run effects of real effective exchange rate, inflation rate and industrial production on foreign demand of transport equipment. The real effective exchange rate indicates competitiveness of domestic producers towards most important trade partners, inflation rate of Slovakia is a proxy for macroeconomic environment and industrial production of the UK stands in for the income variable. The results suggest that export of road vehicles is in the long-run impacted by exchange rate and industrial production. The appreciation of exchange rate reduces export from SR to the UK while rising income increases foreign demand. In the short-run trading with motor vehicles is impacted by all three explanatory variables. The Error correction term indicates that roughly 30 % of disequilibrium in the previous month will be corrected in the current month. The implications are for governing bodies to manage the current commodity framework which is at present mainly oriented on machinery and transport equipment and to support companies from other industries aiming to create more diversified export commodity structure.

Modelling CAR Export from Slovakia to the United Kingdom - Vector Error Correction Approach

Review of Economic Perspectives

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The aim of the article is to identify determinants of export of road vehicles from Slovakia to the United Kingdom. The Error correction model is based on...

Modelling CAR Export from Slovakia to the United Kingdom - Vector Error Correction Approach

Published Online: Dec 21, 2019

Page range: 249 - 264

Received: Jun 02, 2019

Accepted: Aug 23, 2019

DOI: https://doi.org/10.2478/revecp-2019-0014

Keywords
Export, Road Vehicles, Cointegration, VECM model

© 2019 Renáta Pitoňáková, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Modelling CAR Export from Slovakia to the United Kingdom - Vector Error Correction Approach

Published Online: Dec 21, 2019

Page range: 249 - 264

Received: Jun 02, 2019

Accepted: Aug 23, 2019

DOI: https://doi.org/10.2478/revecp-2019-0014

KeywordsExport, Road Vehicles, Cointegration, VECM model

© 2019 Renáta Pitoňáková, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
Export, Road Vehicles, Cointegration, VECM model