Foreign exchange rates and Japanese foreign direct investment in Asia

Baek, In-Mee; Okawa, Tamami

doi:10.1016/s0148-6195(00)00038-2

Cited by 37 publications

(36 citation statements)

References 6 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…A negative and statistical relationship is also observed between the level of minimum nominal wage, the marginal labor productivity and the outsource of Greek outward FDI, under the assumption that there are no differences among the 16 economies (second column). Our results suggest that increases in the nominal wages of the host economies are associated with lower Greek outward FDI to the higher cost economies, confirming theoretical predictions as well as the findings by Baek and Okawa (2001) and Klein and Rosengren (1994). An important finding for the streaming of the Greek outward FDI is also the statistical significance of marginal labor productivity in the host economies.…”

Section: Theoretical Backgroundsupporting

confidence: 87%

“…, implying that potential increases in the prices of nominal wages in the Host economy, would increase the production cost for the MNC and would finally lead to the reduction of the undertaken FDI in the Host Country, an evidence that is also supported by Baek and Okawa (2001) and Klein and Rosengren (1994).…”

Section: Theoretical Backgroundmentioning

confidence: 90%

“…However, if the MNC intends to carry technology or managerial skills to the host regions and use the competitive advantage of these elements over its competitors, then the larger the productivity differential between the home and the host country, the greater the FDI flows to the host economy are. Baek and Okawa (2001) support that labor productivity deferential between the home and the host country, determine FDI flows to the host economy. Finally, the results in Table 1 show that under all the tree estimation methods, the price of the Greek physical capital causes a positive and significant effect on the Greek outward FDI directed to the 16 host countries.…”

Section: Theoretical Backgroundmentioning

confidence: 95%

See 2 more Smart Citations

The Explanatory Variables of Outward Foreign Direct Investment: Panel Evidence

Apergis¹

2012

American Journal of Economics and Business Administration

View full text Add to dashboard Cite

Along with the traditional macroeconomic determinants of FDI, additional explanatory variables, such as the exchange rates, should be encountered in undertaking physical investment decisions, as these variables affect several comparative costs and the cost of lending. The goal of this study is to examine for the first time panel data evidence of Greek outward FDI flows directed to 16 EU and non-EU countries over the period 1997-2008, focusing on the relative importance of emerging variables on the determination of the direction of FDI. The results clearly show that-under different specifications-increases in the level of exchange, affect FDI flows directed from Greece to the host economies. Moreover, significant determinants for the streaming of the Greek FDI are the minimum wage rate and the labour productivity in the host economies as well as the price of the Greek physical capital.

show abstract

Section: Theoretical Backgroundsupporting

confidence: 87%

Section: Theoretical Backgroundmentioning

confidence: 90%

Section: Theoretical Backgroundmentioning

confidence: 95%

See 1 more Smart Citation

The Explanatory Variables of Outward Foreign Direct Investment: Panel Evidence

Apergis¹

2012

American Journal of Economics and Business Administration

View full text Add to dashboard Cite

show abstract

“…Contrary to most studies that say that currency depreciation leads to increased FDI inflows, the study by Tomlin (2008) showed that the appreciation of the US dollar led to an increased flow of Japanese FDI into the service industry of the US. Yet, a study carried out by Baek and Okawa (2001) showed that a depreciation of the Asian currencies against the US dollar attracted quite a substantial amount of FDI into the export-oriented electrical machinery sector as compared to the manufacturing sector. The current study seeks to clarify these contradictions.…”

Section: Review Of Related Literaturementioning

confidence: 99%

FDI location and exchange rates. is there really a relationship between the two?

Tsaurai¹

2015

COC

View full text Add to dashboard Cite

The exchange rate led foreign direct investment (FDI), FDI led exchange rates and feedback effect hypotheses summarise the literature around the nature of the relationship between FDI and exchange rates. So many authors on this subject over a long period have been found to generally side with of the above-mentioned hypothesis or another without a consensus. Despite this lack of consensus with regard to the exact nature of the causal relation between these two variables, what is coming out clearly from the literature is that there indeed exist a relationship between FDI and exchange rates. The lack of consensus has prompted this current study that used the ARDL (Autoregressive distributed lag)-bounds testing approach. The study revealed the existence of causality from (1) the rand value to FDI in the long run and (2) FDI to the rand value only in the short run in South Africa. The author recommends that policies which strengthen the value of the rand should be put in place in order to attract FDI in the long run. The flow of FDI into South Africa will in turn not only stabilises the value of the rand.

show abstract

“…Researches on developing economies (Noorbakhsh et al, 2001); on human capital in general (Miyamoto, 2008) and on workers' productivity (Tarzi, 2005) identify relationship between labor market conditions and FDI. A study on labor cost in Pakistan (Khair- UZ-Zaman et al, 2006); labor productivity for Japanese FDI in Asia (Baeka and Okawa, 2001); relative labor cost on Korea's FDI from US (Jeon and Rhee, 2008); on UK's labor market flexibility (Floyd, 2003); wage rate for Central and Eastern Europe countries and Western Balkan Countries (Kersan-Skabic and Orlic, 2007) and labor market flexibility for transnational corporations located in UK (Whyman and Baimbridge, 2006) have all shown the significance of labor on FDI. Other researches on this variable have come up with opposing results to the majority of the studies we have seen so far.…”

Section: Resource Basementioning

confidence: 99%

Demand Side Factors Affecting the Inflow of Foreign Direct Investment to African Countries: Does Capital Market Matter?

Hailu¹

2010

IJBM

View full text Add to dashboard Cite

This paper aims at providing empirical analysis of the demand side determinants of the inflow of Foreign Direct Investment to African nations, with particular emphasis on stock market availability. Due to data heterogeneity, non-continuity and because the Hausman test favors it, cross section fixed effect Least Square Dummy Variable (LSDV) estimation technique is used. Natural resource, labor quality, trade openness, market accession and infrastructure condition are found to have positive and significant effect. Availability of stock market has the expected positive but insignificant effect. In search of possible explanation governments' expenditure and private domestic investment are added to the regression equation and are found to have positive effect, ruling out the possibility of crowding out effect. Stock markets in Africa are not structured in such a way that they can contribute to attract FDI and hence policy makers should restructure capital markets to get the most out of them. The bottom line is, policy makers of those countries have a lot of demand side instruments under their discretion to attract FDI inflow.

show abstract

Foreign exchange rates and Japanese foreign direct investment in Asia

Cited by 37 publications

References 6 publications

The Explanatory Variables of Outward Foreign Direct Investment: Panel Evidence

The Explanatory Variables of Outward Foreign Direct Investment: Panel Evidence

FDI location and exchange rates. is there really a relationship between the two?

Demand Side Factors Affecting the Inflow of Foreign Direct Investment to African Countries: Does Capital Market Matter?

Contact Info

Product

Resources

About