Work

Untying The Gordian Knot: The Multiple Links Between Exchange Rates and Foreign Direct Investment

Year: 2003

Type: article

Abstract: Theoretical and empirical studies show that the level and volatility of exchange rates can have significant effects on foreign direct investment (FDI). But the evidence is ambiguous, with the impact of exchange rates being heterogeneous across countries and types of investment, and varying over time. Fixed exchange rate regimes may stimulate investment, but largely because of their indirect benefits for the investment climate rather than because of lower currency volatility, especially in larger economies. Careful judgements still need to be made about the appropriate entry rate, since real exchange rate levels can have a long‐lasting impact on the spatial distribution of economic activities and living standards.

Source: JCMS Journal of Common Market Studies

DOI: 10.1111/j.1468-5965.2003.00465.x

Authors: NIGEL PAIN, DESIRÉE VAN WELSUM

Institutions: National Institute of Economic and Social Research, Organisation de Coopération et de Développement Economiques

Language: English

Topic: International Business and FDI

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W2016869827

FWCI: 6.503

Cites: 57

Cited by: 64

Related to: 10