Global Journal of Management and Business Research, B: Economics and Commerce, Volume 23 Issue 1

Global Journal of Management and Business Research: B Economics And Commerce Volume 23 Issue 1 Version 1.0 Year 2023 Type: Double Blind Peer Reviewed International Research Journal Publisher: Global Journals Online ISSN: 2249-4588 & Print ISSN: 0975-5853 Strictly as per the compliance and regulations of: Original Sin and Natural Cover in CEMAC Area By Scott Régifère Mouandat, Etendino Nkombe & Ndong Abessolo De l’Université Abstract - The purpose of this article is to see whether export gains are likely to neutralize, even partially, the effect of the valuation of US dollar-denominateddebt in the EMCCA area. The aim is therefore to verify the effectiveness of the natural hedge. Taking the period 1995-2019, we use an empirical method 5based on the heterogeneous dynamic panel estimator with common- correlated effects. We find that the natural hedgeis inefficient, i.e., the export gains from nominal exchange rate changes do not cover the original sin valuation effect of these same changes. The results of our estimates call for a rethinking of the integration of EMCCA countries into world trade, given that an integration based on the development of large-scale exports is a sine qua non for the effectiveness of natural hedging. Keywords: exchange rate, foreign currency debt, natural hedge, original sin, trade. GJMBR-B Classification: JEL Code: C23. E44. F31. F34. H63 OriginalSinandNaturalCoverinCEMACArea © 2023. Scott Régifère Mouandat, Etendino Nkombe & Ndong Abessolo. This research/review article is distributed under the terms of the Attribution-NonCommercial-NoDerivatives 4.0 International (CC BYNCND 4.0). You must give appropriate credit to authors and reference this article if parts of the article are reproduced in any manner. Applicable licensing terms are at https://creativecommons.org/licenses/by-nc-nd/4.0/.