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Journal of Economic Integration 2024 June;39(2) :394-419.
DOI: https://doi.org/10.11130/jei.2024018
The Impacts of Financial Market, Trade and Economic Policy Uncertainties on the Import Performance of Advanced Economies

Xueting Gong1,3 Dinkneh Gebre Borojo2 Jiang Yushi3.4 Miao Miao5 Peixuan Wu 6

1,3Sichuan University of Public Administration, Chengdu, China
2Yiyang Vocational and Technical College, Yiyang, Hunan, China
3.4School of Economics and Management, Southwest Jiaotong University, Chengdu, China
4Service Science and Innovation Key Laboratory of Sichuan Province, Southwest Jiaotong University, Chengdu, China
5Chengdu Normal University, Chengdu, China
6Sichuan Agricultural University, Chengdu, China
Corresponding Author: Dinkneh Gebre Borojo ,Email: g10dinkneh@yahoo.com
Copyright ©2024 Journal of Economic Integration
ABSTRACT
This study aims to examine the long-term and short-term diverse effects of economic policy uncertainty, trade policy uncertainty, and financial market uncertainties on the import performance of advanced economies. It employs the Pooled mean group autoregressive distributed lag (PMG/ARDL) method for the panel of 27 advanced economies using quarterly data from the first quarter of 1996 to the fourth quarter of 2020. The study's results reveal that local and global economic and trade policy uncertainties have significant adverse long-term effects on the import performance of advanced economies. Besides, financial market uncertainties negatively impact advanced economies’ imports in the long run. Nonetheless, the results imply that domestic economic and trade policy uncertainties positively affect imports in the short run. Moreover, the Dumitrescu-Hurlin (D-H) panel causality test indicated that bidirectional causality exists between financial market and trade policy uncertainty indicators and imports. However, unidirectional causality exists between economic policy indicators and imports. The results are consistent across different sensitivity analyses. Based on these findings, we propose policy implications to control economic, trade and financial market uncertainties and thereby alleviating their impact on the import performance of advanced economies.

JEL Classification
F10: General
F14: Empirical Studies of Trade
E44: Financial Markets and the Macroeconomy
Keywords: import performance | economic policy uncertainty | trade policy uncertainty | financial market uncertainty | advanced economies | heterogeneous panel models
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