The impact of exchange rate volatility on plant-level investment: Evidence from Colombia

Kandilov, Ivan T.; Leblebicioğlu, Aslı

doi:10.1016/j.jdeveco.2010.01.013

Cited by 46 publications

(29 citation statements)

References 49 publications

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“…However, there are similar studies [4,17] whose empirical results negate the finding of this study. [4,17] found that there is existence of negative and significant relationship of the volatility of exchange rates on FDI.…”

Section: Multiple Regression Analysiscontrasting

confidence: 44%

“…It's done with the hope of balance of trade. [17] found that there is the existence of a strong negative and significant impact on the volatility of the real exchange rate on investment at the plant in Colombia. [4] found that there is the existence of the negative and significant relationship of the volatility of exchange rates on FDI in member countries of the EU to Central and Eastern Europe.…”

Section: Literature Reviewmentioning

confidence: 99%

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The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria

Zakari¹

2017

JFA

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Abstract:This study seeks to find out the relationship between foreign exchange rate and foreign direct investment (FDI) and the impact of FDI on the gross domestic product (GDP) in Nigeria, this is important in view of the recent and past devaluation of Nigeria currency as well as the exchange rate changes over the years to be precised 26years coverage . This underscores the need to assess how foreign investors through FDI respond to changes in the exchange rate, and how this relationship affects GDP with a view to identifying gaps and provide policy recommendations and direction to the policy makers and the Nigeria government. To achieve this, data of FDI, exchange rate, and GDP were obtained from the Central Bank of Nigeria (CBN) website for the period under review and analyzed using regression and correlation analysis techniques. Findings from the analysis show that there is a strong positive relationship between FDI and exchange rate in Nigeria on one hand and there is a weak positive relationship between FDI and GDP on the other hand. The researcher also found that there was a significant inflow of FDI from 2005-2014 due to rise in exchange rate in the same period. The study concludes that exchange rate, FDI, and GDP are positively correlated. The study recommended that Government of Nigeria should fully liberalized exchange rate regime devoid of fixed multiple exchange rates so as to attract more FDI and contribute to GDP, this is because commercial viability of any FDI is based on exchange rate stability.

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Section: Multiple Regression Analysiscontrasting

confidence: 44%

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria

Zakari¹

2017

JFA

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“…Similarly, Ukoha (2000) carried out an empirical study of the determinants of capacity utilization in the Nigerian manufacturing industry between 1970 and 1998 and his results revealed that exchange rate had a positive effect on manufacturing capacity utilization. Again, Kandilov and Leblebicioğlu (2011) find a robust negative impact of exchange rate volatility on plant investment. Goldberg (1993) finds that a real depreciation (appreciation) of the U.S. dollar was likely to generate an expansion (reduction) in investment in the 1970s, but that the opposite pattern prevailed during the 1980s.…”

Section: Related Literaturementioning

confidence: 85%

Exchange Rate Variability and Manufacturing Sector Performance in Ghana: Evidence from Cointegration Analysis

Abdul-Mumuni¹

2016

IEB

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This study examined the effect of exchange rate variability on manufacturing sector performance in Ghana. Using time series data from the period 1986-2013 and employing the autoregressive distributed lag (ARDL) approach, the empirical results show that there exists both a short as well as long run relationship between exchange rate and manufacturing sector performance. Thus, in Ghana as the exchange rate appreciates, the manufacturing sector performance improves and as it depreciates, the sector is adversely affected. In view of this, it is recommended that policy should be put in place to regulate the importation of goods that could be locally produced so as to improve the performance of the manufacturing sector. In addition, the government should ensure that there is regular electricity supply, good roads, water and a reliable telecommunication system so that the manufacturing sector can perform effectively and efficiently in order to achieve a considerable rate of economic growth.

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“…Most empirical researches provide little support to the impact of volatility but have found a significant impact of misalignment on a variety of economic variables. 1 These include growth (Cottani et al, 1990;Ghura and Grennes, 1993;Rodrik, 2008;Harms and Kretschmann, 2009), capital accumulation (Goldberg, 1993;Servén, 2003;Kandilov and Leblebicioğlu, 2011), Foreign Direct Investment (Froot and Stein, 1991;Goldberg, 2009), exports and diversification of export (Sekkat and Varoudakis, 2000;Freund and Pierola, 2012), currency crisis (Bussière and Fratzscher, 2006) and trade balance (Hoffmann, 2007).…”

Section: Introductionmentioning

confidence: 99%

What determines the extent of real exchange rate misalignment in developing countries?

Nouira

Sekkat²

2015

International Economics

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The impact of exchange rate volatility on plant-level investment: Evidence from Colombia

Cited by 46 publications

References 49 publications

The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria

The Impact of Exchange Rate Fluctuations on Foreign Direct Investment in Nigeria

Exchange Rate Variability and Manufacturing Sector Performance in Ghana: Evidence from Cointegration Analysis

What determines the extent of real exchange rate misalignment in developing countries?

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