Foreign Direct Investment, Trade and Exchange Rate Volatility PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Foreign Direct Investment, Trade and Exchange Rate Volatility PDF full book. Access full book title Foreign Direct Investment, Trade and Exchange Rate Volatility by Bedassa Tadesse. Download full books in PDF and EPUB format.
Author: Bedassa Tadesse
Publisher: LAP Lambert Academic Publishing
ISBN: 9783838314914
Category : Foreign exchange rates
Languages : en
Pages : 172
Get Book Here
Book Description
The desire of firms' to enhance their global presence, diversify their production and the interest of policymakers to augment domestic production with more efficient foreign technology has contributed to a surge in the cross border flow of capital. By taking into account market characteristics such as market maturity and export platform status of Japanese FDI hosts during the 1990s, this dissertation examines the link between FDI, trade and exchange rate volatility. More specifically, the following questions are addressed: What induces multinational firms to reach diverse destinations? Which of the host country characteristics attract investing firms most? Are trade flows among partners related to the volume of FDI flows between them? What does the geographical distribution of FDI reflect: efficiency, technological advances, or liberalization of trade and FDI policies? Given the diminishing role of the traditional FDI driving factors (such as factor abundance and cheap labor), to what extent do market maturity, export platform status and size of the host nations matter in determining the inflow of FDI?
Author: Joshua Aizenman
Publisher:
ISBN:
Category : Foreign exchange
Languages : en
Pages : 46
Get Book Here
Book Description
The goal of this paper is to investigate the factors determining the impact of exchange rate regimes on the behavior of domestic investment and foreign direct investment (FDI), and the correlation between exchange rate volatility and investment. We assume that producers may diversify internationally in order to increase the flexibility of production: being a multinational enables producers to reallocate employment and production towards the more efficient or the cheaper plant. We characterize the possible equilibria in a macro model that allows for the presence of a short-run Phillips curve, under a fixed and a flexible exchange rate regime. It is shown that a fixed exchange rate regime is more conducive to FDI relative to a flexible exchange rate, and this conclusion applies for both real and nominal shocks. The correlation between investment and exchange rate volatility under a flexible exchange rate is shown to depend on the nature of the shocks. If the dominant shocks are nominal, we will observe a negative correlation, whereas if the dominant shocks are real, we will observe a positive correlation between exchange rate volatility and the level of investment.
Author: Bedassa Tadesse
Publisher: LAP Lambert Academic Publishing
ISBN: 9783838314914
Category : Foreign exchange rates
Languages : en
Pages : 172
Get Book Here
Book Description
The desire of firms' to enhance their global presence, diversify their production and the interest of policymakers to augment domestic production with more efficient foreign technology has contributed to a surge in the cross border flow of capital. By taking into account market characteristics such as market maturity and export platform status of Japanese FDI hosts during the 1990s, this dissertation examines the link between FDI, trade and exchange rate volatility. More specifically, the following questions are addressed: What induces multinational firms to reach diverse destinations? Which of the host country characteristics attract investing firms most? Are trade flows among partners related to the volume of FDI flows between them? What does the geographical distribution of FDI reflect: efficiency, technological advances, or liberalization of trade and FDI policies? Given the diminishing role of the traditional FDI driving factors (such as factor abundance and cheap labor), to what extent do market maturity, export platform status and size of the host nations matter in determining the inflow of FDI?
Author: Callye R. M. Masten
Publisher: ProQuest
ISBN: 9780549388029
Category : Foreign exchange rates
Languages : en
Pages :
Get Book Here
Book Description
The determinants of foreign direct investment (FDI) have been widely examined. Previous studies have shown that exchange rates play a vital role in the analysis and are a major determinant in the flow of FDI. Most research has focused on examining how exchange rate volatility affects the economies of developed nations. However, little research has been done in understanding the impact of exchange rate volatility on FDI flows to Latin America. Developing countries lack the capital that is needed for further growth. Therefore, FDI is important to developing countries, because it allows them to gain the necessary capital. This paper examines the relationship between exchange rate volatility, political institutions and FDI flows into Latin America across two sectors: food processing, and industrial manufacturing. Empirical results show that exchange rate volatility significantly deters the flow of U.S. FDI into Latin America. Other significant economic factors are U.S. interest rates and openness to trade. Conflict and corruption are the political risk factors that have significant impacts on FDI flows. Conclusions from the paper recommend governments in Latin America to implement macroeconomic polices that promote stability, which could help reduce exchange rate volatility and lower inflation.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1451977700
Category : Business & Economics
Languages : en
Pages : 24
Get Book Here
Book Description
Contrary to the arguments of several scholars, we have failed to find either a conclusive theoretical case or clear empirical evidence of an effect, harmful or otherwise, of exchange rate variability (as measured by either short-term volatility or long-run misalignment) on overall levels of international trade. In this paper, after reviewing the theories and evidence on this issue, we go on to consider the impact of exchange rate variability on direct foreign investment. We summarize and amplify upon the scant theoretical literature of this issue, and proceed to test U.S. data for the presence of such an impact. We find none.
Author: Linda S. Goldberg
Publisher:
ISBN:
Category : Demand (Economic theory)
Languages : en
Pages : 40
Get Book Here
Book Description
Author: Bedassa Tadesse Ayele
Publisher:
ISBN:
Category : Foreign exchange rates
Languages : en
Pages : 318
Get Book Here
Book Description
Author: Gerardo Esquivel
Publisher:
ISBN:
Category : Foreign exchange rates
Languages : en
Pages : 40
Get Book Here
Book Description
Concerns the impact of instability of the dollar, yen and deutsche mark on developing countries' exports, foreign direct investment, and exchange rate crises.
Author: Piriya Pholphirul
Publisher:
ISBN:
Category : Foreign exchange rates
Languages : en
Pages : 460
Get Book Here
Book Description
Author: Joshua Aizenman
Publisher:
ISBN:
Category : Capital movements
Languages : en
Pages : 58
Get Book Here
Book Description
The purpose of this paper is to examine the implications of foreign direct investment and endogenous capacity choice on the welfare ranking of exchange rate regimes, and to analyze the linkages between volatility of shocks, the volume of trade and investment. We construct an intertemporal version of a monopolistic competitive framework, where producers may diversify internationally by foreign direct investment. Volatility is shown to induce both higher international trade in goods, as well as higher foreign direct investment, with the possibility of increasing the productive capacity in diversified industries. We apply the above framework to the welfare ranking of exchange rate regimes in the presence of nominal contracts. We show that the volatility of employment in the presence of real shocks is lower under a floating exchange rate regime, but that a by-product of the relative stability of employment is a lower expected GNP in a flexible exchange rate regime. Nominal shocks in a floating exchange rate regime are shown to generate international diversification, which leads to a higher capital cost of diversified industries. This effect implies a lower number of? independent producers and of varieties offered, ultimately leading to a lower expected utility of consumption. We show that attempts to reduce foreign direct investment by capital controls will tend to reduce welfare, without affecting our results regarding the ranking of exchange rate regimes. These observations lead us to conclude that volatility effects reduce the relative attractiveness of floating exchange rates. This conclusion applies to both real and nominal shocks.
Author: Daranee Saeju
Publisher:
ISBN:
Category : Foreign exchange rates
Languages : en
Pages : 262
Get Book Here
Book Description
