Investment in manufacturing, exchange rates and external exposure

The Effect of the Exchange Rates on Investment in Mexican Manufacturing Industry

This paper, considering revenue and cost exposure channels, investigates the effects of exchange rate behaviour on fixed capital investment in Mexican manufacturing sector over 1994-2002. We find that i) currency depreciation has a positive (negative) effect on fixed investment through the export (import) channel; ii) exchange rate volatility impacts mostly export oriented sectors; iii) the sen...

Nonlinearity In Exchange Rates and Forecasting

Exchange Rates and Japanese Direct Investment in China

This paper analyzes FDI and exchange rate nexus in the context of Japanese direct investment in China. Using the data of Japanese direct investment in China’s nine manufacturing sectors from 1981 to 2001, the paper found that, there exists a significantly positive correlation between the bilateral real exchange rate of yen to yuan and Japanese direct investment in China. Specifically, the appre...

Exchange Rates and Foreign Direct Investment in Oligopolies

This paper examines the effects of exchange rates on R&D activities and international strategy choices of the oligopolies. We develop a three-stage game-theoretic model in which two firms located in two different countries (a developing and a developed one) choose the mode of foreign expansion in the first stage. They decide how much to spend on R&D, and how much to sell in domestic and foreign...

Exchange rates and investment good prices: A cross-industry comparison

This paper presents estimates of the impact of exchange rate movements on the industry-level price of investment goods using a panel of OECD countries. An exchange rate depreciation (appreciation) causes a significant rise (fall) in the prices of the investment goods used by most industries, but the magnitude of this effect differs greatly across sectors. A currency depreciation causes a strong...