Are the global economic policy uncertainties blocking the export flows of emerging markets? A heterogeneous panel SVAR analysis

Purpose – This paper examines the effect of global economic policy uncertainty (EPU) on emerging markets (EMs) export flows. Methods uses a structural panel vector autoregression modeling approach to capture country interdependencies and likelihood that EMs’ responses are heterogeneous dynamic. An unbalanced monthly data from 2003:01 2019:12 is used estimate impulse variance decompositions not only for entire but also each EM. Findings The results show EPU has persistent negative exports, while foreign income exchange rate increase volumes in EMs. Given different EMs shocks, second-stage regression estimates suggest greater sectoral diversification an EM can potentially reduce unfavorable impact their Meanwhile, higher technology content exports leads multiplication transmissions. Implication These findings advance literature by highlighting importance accounting transmission considering heterogeneity. Originality sole examining factors mitigate or amplify GEPU impacts flows estimating second-step ordinary least square equations.