Work

Exchange Rate, Exchange Rate Volatility and Foreign Direct Investment

Year: 2004

Type: article

Abstract: In the light of the importance of foreign direct investment (FDI) for the promotion of economic development, this paper examines the impact of the changes in the real exchange rate and its volatility on FDI. Examining Japan's FDI by industries, we found that the depreciation of the currency of the host country attracted FDI, while the high volatility of the exchange rate discouraged FDI. Our results suggest the need to avoid over‐valuation of the exchange rate and to maintain stable but flexible exchange rate in order to attract FDI.

Source: World Economy

DOI: 10.1111/j.1467-9701.2004.00664.x

Authors: Kozo Kiyota, Shujiro Urata

Institutions: Yokohama National University, Keio University, Keio Economic Observatory, Waseda University

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: W2054474426

FWCI: 13.75

Cites: 24

Cited by: 237

Related to: 10