More documents from Schmidt, Christian W.; Broll, Udo
More documents from Review of World Economics

Export to your Reference Manger

Please Copy & Paste



Bookmark and Share

Real exchange-rate uncertainty and US foreign direct investment: an empirical analysis

[journal article]

Schmidt, Christian W.; Broll, Udo

fulltextDownloadDownload full text

(426 KByte)

Citation Suggestion

Please use the following Persistent Identifier (PID) to cite this document:

Further Details
Abstract This paper empirically analyzes the impact of exchange-rate uncertainty, exchange-rate movements, and expectations on foreign direct investment (FDI). Using data on US outward FDI for the period 1984–2004 we examine two competing measures of exchange-rate volatility. While the standard measure yields a discouraging effect on FDI outflows in all industries the alternative risk specification reveals a clear distinction between manufacturing and non-manufacturing industries, with the latter showing a positive correlation with increased exchange risk. A real appreciation of host-country currency was associated with higher FDI flows, while expectations about an appreciation showed a negative result.
Classification Political Economy
Free Keywords Foreign direct investment; Real exchange-rate risk; Volatility; F21; F23
Document language English
Publication Year 2009
Page/Pages p. 513-530
Journal Review of World Economics, 145 (2009) 3
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)