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| Author | : Linda S. Goldberg |
| Publisher | : |
| Total Pages | : 30 |
| Release | : 1993 |
| Genre | : |
| ISBN | : |
| Author | : Linda S. Goldberg |
| Publisher | : |
| Total Pages | : 26 |
| Release | : 1995 |
| Genre | : |
| ISBN | : |
| Author | : Linda S. Goldberg |
| Publisher | : |
| Total Pages | : 40 |
| Release | : 1994 |
| Genre | : Demand (Economic theory) |
| ISBN | : |
| Author | : Mr.Luca Antonio Ricci |
| Publisher | : International Monetary Fund |
| Total Pages | : 35 |
| Release | : 1998-02-01 |
| Genre | : Business & Economics |
| ISBN | : 1451927355 |
This paper shows that exchange rate variability promotes agglomeration of economic activity. Under flexible rates, firms located in large markets have lower variability of sales, reinforcing concentration of firms there. Empirical evidence on OECD countries demonstrates (1) that the negative effect of country size on variability of industrial production is stronger after the 1973 collapse of fixed rates and (2) for small (large) countries, exchange rates variability has a long-run negative (positive) effect on net inward FDI flows. Two implications arise: creating a currency area fosters agglomeration in the area, and a two-stage EMU may exacerbate the current uneven regional development.
| Author | : Michal Brzozowski |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2009 |
| Genre | : |
| ISBN | : |
The aim of the paper is to analyze theoretically and empirically the likely impact of the reduction in exchange rate uncertainty, due to the EMU accession, on the intensity of FDI inflow into candidate countries. Theoretical models give an ambiguous picture of how exchange rate uncertainty and volatility affect direction and magnitude of FDI inflows. The main contribution of this paper is in finding that exchange rate uncertainty and volatility may negatively influence the decision to locate investment in transition and accession countries. Nominal exchange rate uncertainty seems to particularly hamper FDI inflows in accession countries. The key finding of this paper is that euro adoption is likely to exert a positive influence on FDI inflows in accession countries.
| Author | : Mr.Joshua Aizenman |
| Publisher | : International Monetary Fund |
| Total Pages | : 38 |
| Release | : 1992-03 |
| Genre | : Business & Economics |
| ISBN | : |
This paper investigates the factors determining the impact of exchange rate regimes on the behavior of domestic investment and foreign direct investment (FDI). Producers may diversify internationally in order to increase the flexibility of production. We characterize the possible equilibria in a macro model that allows for the presence of a short-run Phillips curve. 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. If the dominant shocks are nominal (real) we will observe a negative (a positive) correlation between exchange rate volatility and the level of investment.
| Author | : David Nickerson |
| Publisher | : |
| Total Pages | : 28 |
| Release | : 1991 |
| Genre | : Foreign exchange rates |
| ISBN | : |
| Author | : Hongmo Sung |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2001 |
| Genre | : |
| ISBN | : |
We investigate how exchange-rate uncertainty affects the foreign direct investment decision of a risk-neutral multinational firm (MNF). We assume the firm can open plants, each with decreasing average costs, in two different countries. Under certainty, the MNF would open only one plant. We demonstrate that with sufficient exchange-rate volatility, the firm can increase expected profits by opening several plants. We also show that if the MNF faces a competitor in the foreign market, the exchange risk, by inducing the MNF to open plants in both markets, may prevent entry by the local competitor.
| Author | : Chia-Ching Lin |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2010 |
| Genre | : |
| ISBN | : |
This paper examines the impact of exchange rate uncertainty on the timing of foreign direct investment (FDI) with heterogeneous investing motives. We first extend Dixit-Pindyck's real options model to show that while an increase in exchange rate volatility tends to delay FDI of a market-seeking firm, it might accelerate FDI of an export-substituting firm if the firm's degree of risk aversion is high enough. The rationale behind this finding is that a market-seeking FDI might increase the exposure of the firm's profits to exchange rate risk, while an export-substituting FDI might reduce it. Empirical evidence from a survival analysis based on firm-level data on the entry by Taiwanese firms into China over the period between 1987 and 2002 is consistent with the theory. These results reveal that the relationship between exchange rate uncertainty and FDI is crucially dependent on the motives of the investing firms.
| Author | : Julia Darby |
| Publisher | : |
| Total Pages | : 56 |
| Release | : 1998 |
| Genre | : Finance |
| ISBN | : |
