Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
962896 | Journal of International Economics | 2007 | 29 Pages |
Abstract
This paper argues that when the exchange rate and projected sales in the host country are jointly determined by underlying macroeconomic variables, regressions of FDI flows on both exchange rate levels and volatility are subject to bias. The results demonstrate that a multinational firm's response to exchange rate volatility will differ depending on whether the volatility arises from shocks in the firm's native or host country. It is the first study to depart from the representative-firm framework in an analysis of direct investment behavior with money.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Katheryn Niles Russ,