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

Schmidt, Christian W.; Broll, Udo

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%T Real exchange-rate uncertainty and US foreign direct investment: an empirical analysis
%A Schmidt, Christian W.
%A Broll, Udo
%J Review of World Economics
%N 3
%P 513-530
%V 145
%D 2009
%K Foreign direct investment; Real exchange-rate risk; Volatility; F21; F23
%= 2010-11-16T09:46:00Z
%~ http://www.peerproject.eu/
%> https://nbn-resolving.org/urn:nbn:de:0168-ssoar-203251
%X 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.
%C DEU
%G en
%9 journal article
%W GESIS - http://www.gesis.org
%~ SSOAR - http://www.ssoar.info