How Do World Commodity Prices Affect Asian Commodity Exporting Economies? The Role of Financial Frictions
Open accessAbstract
This note examines how recent volatile fluctuations of world commodity prices due to the COVID-19 shock affect Asian commodity exporting economies. Our analysis shows that a drop in world commodity prices has a significant negative impact on output, consumption, and investment of sample countries. However, the impact on trade balance is positive in some countries and negative in others. The difference between these two groups is attributable to whether world commodity prices affect each country’s interest rate spreads.
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Financial frictions can influence how world commodity prices affect exporting economies, indicating that interconnectedness of financial markets can lead to increased volatility in agricultural prices.
“The work of Kitano (2021) suggests that financial frictions can influence how world commodity prices affect exporting economies, indicating that the interconnectedness of financial markets can lead to increased volatility in agricultural prices.”
From Food Financialization: Impact of Derivatives and Index Funds on Agri-Food Market Volatility (2024) · cites this paper as Kitano (2021)
The Introduction and Section III report that financial frictions can shape how commodity-price changes affect exporting economies, including through borrowing costs. They do not establish that interconnected financial markets increase agricultural-price volatility; the paper examines how commodity prices affect economies and interest-rate spreads, not the reverse. (LLM, conf=0.90)
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Food Financialization: Impact of Derivatives and Index Funds on Agri-Food Market Volatility
Venegas, M. D. R., Feregrino, J., Lay, N., & Espinosa-Cristia, J. F. (2024) · International Journal of Financial Studies · doi:10.3390/ijfs12040121 · Cited by 13 · see citing works
- Authors
- Kitano, S.
- Affiliations
- Kobe University (JP)
- Corresponding author
- Kitano, Shigeto
- ORCID
- Kitano, Shigeto
- Venue
- Applied Economics Letters
- Publisher
- Informa UK Limited
- Published
- 2021-03-08
- Volume
- 29
- Issue
- 1
- Pages
- 84-90
- ISSN
- 1350-4851 (ISSN-L)
- 1466-4291
- OpenAlex
- W3083131224
- Cited by
- 2
- References
- 9
- Citations by year
- 2026: 1 · 2025: 1
- FWCI
- 0.00
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Licence
- Locations
- Applied Economics Letters (publishedVersion, cc-by-nc-nd)
- Institutional Repositories DataBase (IRDB) (acceptedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Kobe University Repository Kernel (Kobe University) (submittedVersion, cc-by-nc-nd)
- Funders
- KAKENHI (16K03741, 20K01744)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Market Dynamics and Volatility
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
- Social Sciences › Economics, Econometrics and Finance › Finance › Global Financial Crisis and Policies
- Keywords
- international commodity prices, commodity price volatility, financial frictions, COVID-19 shock, output effects, consumption, investment, trade balance, interest rate spreads
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