Title: Linking Exchange Rates to Foreign Direct Investment
Abstract: This study investigates the effect of fluctuations in and volatility of the real exchange rate on foreign direct investment. A fixed-effects variation of the gravity model is applied to panel data of 55 countries from 1980 to 1997. Weak host currencies and greater exchange rate volatility are found to discourage FDI flows. Further, an existing presence in the form of previous investment is found to mitigate the detrimental impact of a weak currency.
Publication Year: 2008
Publication Date: 2008-02-12
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 21
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