Download or read book International Firm Investment under Exchange Rate Uncertainty written by Alexandre Jeanneret and published by . This book was released on 2018 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper proposes a real options theory to explore the effect of exchange rate uncertainty on foreign direct investment. Firms face the choice between serving foreign markets through exports and investing abroad to relocate production. The model predicts that the most productive firms invest abroad when exchange rate volatility is low and export otherwise, whereas the least productive firms invest abroad when volatility is high. The aggregation over heterogeneous firms produces a negative and non-linear relation between exchange rate uncertainty and total international investment. An analysis of 75 developed and emerging economies over the period 1996-2012 provides empirical support for the model's prediction.
Download or read book Strategic Foreign Investment and Endogenous Market Structure Under Exchange Rate Uncertainty written by David Nickerson and published by . This book was released on 1991 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Firm Investment Under Exchange Rate Uncertainty written by José Campa and published by . This book was released on 1991 with total page 312 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Firm Investment Under Exchange Rate Uncertainty written by José Manuel Campa Fernández and published by . This book was released on 1991 with total page 312 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book International Investment Uncertainty written by United States. Congress. House. Committee on Banking, Currency and Housing. Subcommittee on International Trade, Investment and Monetary Policy and published by . This book was released on 1977 with total page 132 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Exchange Rates and Corporate Performance written by Yakov Amihud and published by Beard Books. This book was released on 2003 with total page 268 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is a reprint of a previously published book. It consists of a series of papers by experts in the field on how the exchange rate volatility of the 1980s affected the financial policies of international firms.
Download or read book Investment and Institutional Uncertainty written by Aymo Brunetti and published by World Bank Publications. This book was released on 1997-01-01 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Looking decades ahead into the future, many informed observers see China moving steadily to the top of the world's economic league. Several sources, including the OECD, forecast that the country will be the world's largest economy by 2020. China's urban economy has been the driving force behind the country's recent trends of accelerated growth. By the same token, deterioration in the urban centers could constrain future growth. The Dynamics of Urban Growth in Three Chinese Cities looks at the interplay between geography, size, and industrial structure that determines the industrial vigor of cities. Their conclusions, abundantly illustrated through the experience of the Chinese cities of Shanghai, Tianjin, and Guangzhou, is that each of these factors must be made to work for the city through effective policymaking. The authors compare these cities with each other in the context of the changes sweeping China's economy, review their history and their reform programs from the early 1980s to the mid-1990s, and examine their infrastructure and human capital. The volume includes maps of the cities and their outlying areas and of China's road and rail system, as well as figures depicting the industrial structure of each city. Published for the World Bank by Oxford University Press.
Download or read book Foreign Exchange Intervention under Policy Uncertainty written by Gustavo Adler and published by International Monetary Fund. This book was released on 2016-03-23 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the use of foreign exchange (FX) intervention as an additional policy instrument in an environment with learning, where agents infer the central bank policy rules from its policy actions. Under full information, a central bank focused on stabilizing output and inflation can achieve better outcomes by using FX intervention as an additional policy tool. Under policy uncertainty, where agents perceive that monetary policy may also have exchange rate stabilization goals, the use of FX intervention entails a trade-off, reducing output volatility while increasing inflation volatility. While having an additional policy tool is always beneficial, we find that the optimal magnitude of intervention is higher in monetary policy regimes with lower uncertainty. These results indicate that the benefits of using FX intervention as an additional stabilization tool are greater in regimes where monetary policy is credibly focused on output and inflation stabilization.
Download or read book Quantitative Models for Supply Chain Management written by Sridhar Tayur and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 851 pages. Available in PDF, EPUB and Kindle. Book excerpt: Quantitative models and computer-based tools are essential for making decisions in today's business environment. These tools are of particular importance in the rapidly growing area of supply chain management. This volume is a unified effort to provide a systematic summary of the large variety of new issues being considered, the new set of models being developed, the new techniques for analysis, and the computational methods that have become available recently. The volume's objective is to provide a self-contained, sophisticated research summary - a snapshot at this point of time - in the area of Quantitative Models for Supply Chain Management. While there are some multi-disciplinary aspects of supply chain management not covered here, the Editors and their contributors have captured many important developments in this rapidly expanding field. The 26 chapters can be divided into six categories. Basic Concepts and Technical Material (Chapters 1-6). The chapters in this category focus on introducing basic concepts, providing mathematical background and validating algorithmic tools to solve operational problems in supply chains. Supply Contracts (Chapters 7-10). In this category, the primary focus is on design and evaluation of supply contracts between independent agents in the supply chain. Value of Information (Chapters 11-13). The chapters in this category explicitly model the effect of information on decision-making and on supply chain performance. Managing Product Variety (Chapters 16-19). The chapters in this category analyze the effects of product variety and the different strategies to manage it. International Operations (Chapters 20-22). The three chapters in this category provide an overview of research in the emerging area of International Operations. Conceptual Issues and New Challenges (Chapters 23-27). These chapters outline a variety of frameworks that can be explored and used in future research efforts. This volume can serve as a graduate text, as a reference for researchers and as a guide for further development of this field.
Download or read book Real Exchange Rates Economic Complexity and Investment written by Steve Brito and published by International Monetary Fund. This book was released on 2018-05-10 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show that the response of firm-level investment to real exchange rate movements varies depending on the production structure of the economy. Firms in advanced economies and in emerging Asia increase investment when the domestic currency weakens, in line with the traditional Mundell-Fleming model. However, in other emerging market and developing economies, as well as some advanced economies with a low degree of structural economic complexity, corporate investment increases when the domestic currency strengthens. This result is consistent with Diaz Alejandro (1963)—in economies where capital goods are mostly imported, a stronger real exchange rate reduces investment costs for domestic firms.
Download or read book The Real Effects of Exchange Rate Risk on Corporate Investment written by Mark P. Taylor and published by . This book was released on 2020 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: We empirically investigate the real effects of exchange rate risk on investment activities of international firms. We provide cross-country, firm-level evidence that greater unexpected currency volatility leads to significantly lower capital expenditures. The effect is stronger for countries with higher economic openness and for firms that do not use currency derivatives to hedge. We empirically test the implications of two potential mechanisms: Real options and precautionary savings. Our findings are consistent with both explanations. Two historical events in the FX markets strengthen the identification of our results.
Download or read book Uncertainty Flexible Exchange Rates and Agglomeration written by Mr.Luca Antonio Ricci and published by International Monetary Fund. This book was released on 1998-02-01 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper shows that exchange rate variability promotes agglomeration of economic activity. Under flexible rates, firms located in large markets have lower variability of sales, reinforcing concentration of firms there. Empirical evidence on OECD countries demonstrates (1) that the negative effect of country size on variability of industrial production is stronger after the 1973 collapse of fixed rates and (2) for small (large) countries, exchange rates variability has a long-run negative (positive) effect on net inward FDI flows. Two implications arise: creating a currency area fosters agglomeration in the area, and a two-stage EMU may exacerbate the current uneven regional development.
Download or read book Dollar Exchange Rate Volatility and Productivity Growth in Emerging Markets Evidence from Firm Level Data written by Kodjovi M. Eklou and published by International Monetary Fund. This book was released on 2023-05-26 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the impact of Dollar exchange rate volatility on firm productivity in Emerging Markets economies (EMs). Using firm level data covering 16 EMs over the period 1998 -2019, the paper shows that dollar exchange rate volatility reduces firm productivity growth. Exploring channels, its finds that the results are driven by countries with low level of financial development, high dollar invoicing, high bilateral trade with the US, high collective bargaining coverage and open capital account. Exploring the role of policy, it finds that Foreign Exchange Interventions (FXI) dampen this impact on firm productivty. Further, exploiting firm level data, the paper shows that dollar exchange rate volatility operates also through the financial friction channel, reducing contemporaneous investments, especially at firms with low liquidity buffers and weak balance sheet (high leverage). The role of financial frictions is confirmed through the finding that younger firms, more likely to face financial constraints, are also found to be more vulnerable to dollar exchange rate volatility. In addition, we also find evidence of a large and persistent effect on firms with highly irreversible investment, lending support for the real option channel of uncertainty on the dollar exchange rate. These findings are robust to a battery of tests, including controlling for uncertainty, financial crises and using an instrumental variable strategy exploiting US monetary policy shocks as an exogenous source of variation in dollar exchange rate volatility.
Download or read book The Value of Switching and Growth Options in Foreign Direct Investment written by Sangcheol Song and published by . This book was released on 2008 with total page 127 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: In this dissertation, we show that the geographic and ownership configurations of foreign direct investment have different theoretical implications for growth and switching options under different types of host country uncertainty. The literature has not taken this into account, which may explain the mixed and inconclusive results of prior studies on the real options value of international investments. Using a panel data of Korean foreign direct investment during the period 1991-2004, a period encompassing varying conditions of uncertainty in host countries, we find that firms with switching options (gained through highly dispersed operations and higher level of ownership across countries) were associated with higher value than those without such options in periods of higher uncertainty of exchange rates within international network. We also find that firms with growth options (gained through concentrated presence of subsidiaries and lower level of ownership within international network) were associated with higher value than firms without such options in conditions of host economic uncertainty. Additionally, we found the evidence to be consistent with the argument that cultural distance imposed significant additional costs that reduced the value of breadth to the firm. In this case as well, higher ownership helped to mitigate these adverse effects of cultural distance. Finally, we examined the firm's decision to add to its portfolio of investments in order to assess whether or not the firm made ongoing decisions on the basis of its flexibility needs. We found evidence that firms facing exchange rate uncertainty enhanced the breadth of their FDI portfolio, consistent with the desire to gain switching options. On the other hand, firms facing host market uncertainty tended to enhance the depth of their FDI portfolio, consistent with the desire to gain growth options.
Download or read book Strategic Vertical Foreign Investment Under Exchange Rate Uncertainty written by Santanu Roy and published by . This book was released on 1996 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Era of Uncertainty written by Francois Trahan and published by John Wiley & Sons. This book was released on 2011-07-13 with total page 228 pages. Available in PDF, EPUB and Kindle. Book excerpt: Macroeconomic Investment Strategies for an Era of Economic Uncertainty “Over the years, François’ insightful analyses of the business cycle has led to market calls that have both benefitted investors on the upside and (more important to many) protected them from losses on the downside. François’ incredible track record in successfully interpreting the trends that can be found in leading indicators and other macroeconomic data have also led to his well deserved reputation as an expert in sector rotation - providing investors on both the long and short side of the market opportunities to profit from his ideas. In my opinion, his most important and influential macro prediction to date was his call in the middle of the last decade when he predicted that the worst housing crisis in American history would soon be upon us, and that it would have far-ranging implications for both the global economy and world financial markets.”
Download or read book FX Funding Risks and Exchange Rate Volatility Korea s Case written by Mr.Jack Ree and published by International Monetary Fund. This book was released on 2012-11-07 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines how exchange rate volatility and Korean banks’ foreign exchange liquidity mismatches interacted with each other during the Global Financial Crisis, and whether the vulnerability stemming from this interaction has been reduced since then. Structural and cyclical changes after the crisis, including decreasing demand for currency hedges and the diversifying investor base for bonds, point to a possible weakening of the interaction mechanism; and we find evidences are strongly supportive of this.
