Download or read book Exchange Rates and Foreign Direct Investment written by Kenneth Froot and published by . This book was released on 1989 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the connection between exchange rates and foreign direct investment that arises when globally integrated capital markets are subject to informational imperfections. These imperfections cause external financing to be more expensive than internal financing, so that changes in wealth translate into changes in the demand for direct investment. By systematically lowering the relative wealth of domestic agents, a depreciation of the domestic currency can lead to foreign acquisitions of certain domestic assets. we develop a simple model of this phenomenon and test for its relevance in determining international capital flows.
Download or read book EXCHANGE RATE AND FOREIGN DIRECT INVESTMENT AN IMPERFECT CAPITAL MARKETS APPROACH written by Kenneth A. FROOT and published by . This book was released on 1989 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Exchange Rates and Foreign Direct Investment written by Kenneth Froot and published by . This book was released on 2008 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the connection between exchange rates and foreign direct investment that arises when globally integrated capital markets are subject to informational imperfections. These imperfections cause external financing to be more expensive than internal financing, so that changes in wealth translate into changes in the demand for direct investment. By systematically lowering the relative wealth of domestic agents, a depreciation of the domestic currency can lead to foreign acquisitions of certain domestic assets. we develop a simple model of this phenomenon and test for its relevance in determining international capital flows.
Download or read book The Real Exchange Rate and Foreign Direct Investment in the United States written by Michael W. Klein and published by . This book was released on 1992 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: There has been a significant correlation between United States inward foreign direct investment and the United States real exchange rate since the 1970s. Two alternative reasons for this relationship are that the real exchange rate affects the relative cost of labor and that the real exchange rate alters relative wealth across countries. In this paper we explore these alternatives by examining the determinants of four measures of inward foreign direct investment to the United States from seven industrial countries over the period 1979 to 1991. We find strong evidence that relative wealth significantly affects U.S. inward foreign direct investment. We find no evidence that relative wages have a significant impact on the determination of U.S. foreign direct investment. These results are robust to the choice of countries in our sample and when controlling for changes in tax codes.
Download or read book International Capital Flows written by Martin Feldstein and published by University of Chicago Press. This book was released on 2007-12-01 with total page 500 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent changes in technology, along with the opening up of many regions previously closed to investment, have led to explosive growth in the international movement of capital. Flows from foreign direct investment and debt and equity financing can bring countries substantial gains by augmenting local savings and by improving technology and incentives. Investing companies acquire market access, lower cost inputs, and opportunities for profitable introductions of production methods in the countries where they invest. But, as was underscored recently by the economic and financial crises in several Asian countries, capital flows can also bring risks. Although there is no simple explanation of the currency crisis in Asia, it is clear that fixed exchange rates and chronic deficits increased the likelihood of a breakdown. Similarly, during the 1970s, the United States and other industrial countries loaned OPEC surpluses to borrowers in Latin America. But when the U.S. Federal Reserve raised interest rates to control soaring inflation, the result was a widespread debt moratorium in Latin America as many countries throughout the region struggled to pay the high interest on their foreign loans. International Capital Flows contains recent work by eminent scholars and practitioners on the experience of capital flows to Latin America, Asia, and eastern Europe. These papers discuss the role of banks, equity markets, and foreign direct investment in international capital flows, and the risks that investors and others face with these transactions. By focusing on capital flows' productivity and determinants, and the policy issues they raise, this collection is a valuable resource for economists, policymakers, and financial market participants.
Download or read book Foreign Exchange Risk and Direct Foreign Investment written by Michael H. Siegel and published by . This book was released on 1983 with total page 122 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Risk and Foreign Direct Investment written by C. White and published by Springer. This book was released on 2006-01-25 with total page 274 pages. Available in PDF, EPUB and Kindle. Book excerpt: Incorporating an accurate measure of risk is important to the appraisal of an international investment. This book examines and recommends how decisions on international investment projects are made. Critiquing and integrating existing theory, it shows how risk can be incorporated into the present value formula produce a clear decision rule.
Download or read book World Market Integration Through the Lens of Foreign Direct Investors written by Luis Serven and published by World Bank Publications. This book was released on 2003 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: Albuquerque, Loayza, and Serven analyze the unparalleled increase in foreign direct investment to emerging market economies in the past 25 years. Using a large cross-country timeseries data set, the authors evaluate the dependence of foreign direct investment on global factors or worldwide sources of risk (that is, factors that drive foreign direct investment across several countries). They construct a globalization measure that equals the share of explained variation in direct investment attributable to global factors. The authors show that the globalization measure has increased steadily for industrial and developing countries. For the full sample of countries, the globalization measure rose eightfold from 1985 to 1999. Furthermore, in recent years developing countries' exposure to global factors has approached that of industrial countries, particularly for Latin America. Finally, the globalization measure correlates strongly with measures of capital market liberalization. Overall, the authors find strong support for the hypothesis of increased market integration which implies a greater role for worldwide sources of risk. They discuss the implications of the results for public policies regarding capital market liberalization and policies directed at attracting foreign investment.This paper - a product of Macroeconomics and Growth, Development Research Group - is part of a larger effort in the group to understand international capital flows.
Download or read book Foreign direct investment other capital flows and current account deficits written by Maxwell J. Fry and published by World Bank Publications. This book was released on 1995 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Exchange Rate Flexibility Volatility and the Patterns of Domestic and Foreign Direct Investment written by Joshua Aizenman and published by . This book was released on 1992 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: The goal of this paper is to investigate the factors determining the impact of exchange rate regimes on the behavior of domestic investment and foreign direct investment (FDI), and the correlation between exchange rate volatility and investment. We assume that producers may diversify internationally in order to increase the flexibility of production: being a multinational enables producers to reallocate employment and production towards the more efficient or the cheaper plant. We characterize the possible equilibria in a macro model that allows for the presence of a short-run Phillips curve, under a fixed and a flexible exchange rate regime. It is shown that a fixed exchange rate regime is more conducive to FDI relative to a flexible exchange rate, and this conclusion applies for both real and nominal shocks. The correlation between investment and exchange rate volatility under a flexible exchange rate is shown to depend on the nature of the shocks. If the dominant shocks are nominal, we will observe a negative correlation, whereas if the dominant shocks are real, we will observe a positive correlation between exchange rate volatility and the level of investment.
Download or read book American Business Abroad written by Charles Poor Kindleberger and published by New Haven : Yale University Press. This book was released on 1969 with total page 225 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Foreign Direct Investment Exchange Rate Variability and Demand Uncertainity written by Linda S. Goldberg and published by . This book was released on 1994 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Foreign Direct Investment in a Macroeconomic Framework written by Maxwell J. Fry and published by . This book was released on 1992 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Vers Under Imperfect Competition and Foreign Direct Investment written by and published by World Bank Publications. This book was released on with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Fixed Investment and Capital Flows written by Mr.Peter B. Clark and published by International Monetary Fund. This book was released on 1998-08-01 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper draws a link between international capital flows and the real options approach to investment by extending a model of real estate investment. It explains gradual investment, investment booms, and investment during recessions and emphasizes sunk costs, uncertainty, and the value of waiting. The optimal waiting time increases as foreign borrowing becomes more expensive because higher returns are required to cover the sunk costs of investing. The lower the initial level of profitability, the more likely investment will be sequential; conversely, a relatively high initial rate of return will be associated with simultaneous investment.
Download or read book Foreign Direct Investment and Exchange Rate Uncertainty in Imperfectly Competitive Industries written by Ray Barrell and published by . This book was released on 2003 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Capital Flows and Foreign Direct Investments in Emerging Markets written by Sima Motamen-Samadian and published by . This book was released on 2005 with total page 180 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is a collection of nine studies on the impact of capital flows and FDIs in emerging economies. The authors examine the extent by which macroeconomic variables and financial development of different countries can be affected by capital flows. The regions under investigation include Asia, Latin America, Eastern and Central Europe, North Africa and the Middle East. The studies show how capital and trade openness can enhance financial development of the countries; how the sensitivity Mexican macroeconomic variables to fluctuations in capital flows have changed under different exchange rate regimes; how political stability can play a role in the bargaining power of post-soviet states with MNEs; how ethnic background plays a role in foreign exchange risk taking of Malaysian managers; the extent by which African and Middle Eastern countries have fallen behind other emerging markets in the level of FDIs they have attracted; and finally how important economic and social freedom is in attracting FDIs.
