Foreign Direct Investment and Exchange Rate Regimes

Foreign Direct Investment and Exchange Rate Regimes

The paper uses a comprehensive data set with bilateral direct investment flows and establishes the influence of the de-facto exchange rate regime for FDI flows. We find a strong and significant effect from fixed rates on bilateral FDI flows in developed economies, but no significant effect for devel...

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Bibliographic Details
Published in:MAGKS - Joint Discussion Paper Series in Economics (Band 15-2010)
Main Authors: Busse, Matthias, Hefeker, Carsten, Nelgen, Signe
Format: Work
Language:English
Published: Philipps-Universität Marburg 2010
Subjects:
Wirtschaft
Foreign Direct Investment
Multinational Enterprises
Exchanges Rate Regimes
Economics
Online Access:PDF Full Text
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Summary:The paper uses a comprehensive data set with bilateral direct investment flows and establishes the influence of the de-facto exchange rate regime for FDI flows. We find a strong and significant effect from fixed rates on bilateral FDI flows in developed economies, but no significant effect for developing countries. There is thus no general and uniform impact of stable exchange rates on FDI. We provide several possible explanations for this difference.
Physical Description:29 Pages
ISSN:1867-3678
DOI:10.17192/es2024.0045

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