The impact of exchange rate movements on foreign direct investment: Market-oriented versus cost-oriented

Developing Economies

Volumn 44, Issue 3, 2006, Pages 269-287

  Chen, Kun Ming ^a   Rau, Hsiu Hua ^a   Lin, Chia Ching ^a  

^a NATIONAL CHENGCHI UNIVERSITY   (Taiwan)

Author keywords

Exchange rate movements; FDI; Real options approach

Indexed keywords

CURRENCY DEVALUATION; CURRENCY MARKET; ECONOMIC CONDITIONS; EXCHANGE RATE; FOREIGN DIRECT INVESTMENT; MARKET CONDITIONS;

ASIA; CHINA; EURASIA; FAR EAST; TAIWAN;

EID: 33746581657     PISSN: 00121533     EISSN: 17461049     Source Type: Journal    
DOI: 10.1111/j.1746-1049.2006.00017.x     Document Type: Article

References (30)

1. Blonigen, Bruce A. 1997. "Firm-Specific Assets and the Link between Exchange Rates and Foreign Direct Investment." American Economic Review 87, no. 3: 447-65.
2. Campa, Jose Manuel. 1993. "Entry by Foreign Firms in the United States under Exchange Rate Uncertainty." Review of Economics and Statistics 75, no. 4: 614-22.
3. Carruth, Alan; Andy Dickerson ; and Andrew Henley. 2000. "What Do We Know about Investment under Uncertainty." Journal of Economic Surveys 14, no. 2: 119-53.
4. Chen, Chien-Hsun. 1996. "Regional Determinants of Foreign Investment in Mainland China." Journal of Economic Studies 23, no. 2: 18-30.
5. Chen, Jong-Rong, and Chih-Hai Yang. 1999. "Determinants of Taiwanese Foreign Direct Investment-Comparison between Expansionary FDI and Defensive FDI." Taiwan Economic Review 27, no. 2: 215-40.
6. Chen, Tain-Jy. 1992. "Determinants of Taiwan's Direct Foreign Investment: The Case of a Newly Industrializing Country." Journal of Development Economics 39, no. 2: 397-407.
7. China, Republic of, Ministry of Economic Affairs, Bureau of Statistics. 1999-2001. Survey on Outward Foreign Direct Investment. Taipei.
8. China, Republic of, Ministry of Economic Affairs, Investment Commission. 1999-2003. Survey on Taiwanese Firms in Mainland China. Taipei.
9. China, Republic of, Ministry of Economic Affairs, Investment Commission. 2004. Statistics on Overseas Chinese & Foreign Investment, Technical Cooperation, Outward Investment, Outward Technical Cooperation. Taipei.
10. Cushman, David O. 1985. "Real Exchange Rate Risk, Expectations, and the Level of Direct Investment." Review of Economics and Statistics 67, no. 2: 297-308.
11. De Grauwe, Paul. 1996. International Money: Postwar Trends and Theories. 2nd ed. London: Oxford University Press.
12. Dixit, Avinash K. 1989a. "Entry and Exit Decisions under Uncertainty." Journal of Political Economy 97, no. 3: 620-38.
13. Dixit, Avinash K. 1989b. "Hysteresis, Import Penetration, and Exchange Rate Pass-Through." Quarterly Journal of Economics 104, no. 2: 205-28.
14. Dixit, Avinash K., and Robert S. Pindyck. 1994. Investment under Uncertainty. Princeton, N. J.: Princeton University Press.
15. Frankel, Jeffrey A., and Andrew K. Rose. 1995. "Empirical Research on Nominal Exchange Rates." In Hankbook of International Economics, vol. 3, ed. G. Grossman and K. Rogoff. Amsterdam: Elsevier Science.
16. Froot, Kenneth A., and Jeremy C. Stein. 1991. "Exchanges Rates and Foreign Direct Investment: An Imperfect Capital Markets Approach." Quarterly Journal of Economics 106, no. 4: 1191-217.
17. Goldberg, Linda S. 1993. "Exchange Rates and Investment in United States Industry," Review of Economics and Statistics 75, no. 4: 575-588.
18. Gorg, Holger, and Katherine Wakelin. 2002. "The Impact of Exchange Rate Variability on US Direct Investment." Manchester School 70, no. 3: 380-97.
19. Henley, John; Colin Kirkpatrick; and Georgina Wilde. 1999. "Foreign Direct Investment in China: Recent Trend and Currency Policy Issues." World Economy 22, no. 2: 223-43.
20. Hsiao, Cheng. 2003. Analysis of Panel Data. 2nd ed. Cambridge: Cambridge University Press.
21. Klein, Michael W., and Eric S. Rosengren. 1994. "The Real Exchange Rate and Foreign Direct Investment in the United States: Relative Wealth vs. Relative Wage Effects." Journal of International Economics 36, nos. 3-4: 373-89.
22. Kohlhagen, Steven W. 1977. "Exchange Rate Changes, Profitability, and Direct Foreign Investment." Southern Economic Journal 44, no. 1: 43-52.
23. Laar, Mindel van de. 2000. "Foreign Direct Investment Decisions under Uncertainty in Central and Eastern Europe." Working Paper. Maastricht: Business Investment Research Center, Maastricht University.
24. Liu, Bih-Jane, and Hui-Lin Lin. 2001. "Reverse Imports and Outward Direct Investment." Taiwan Economic Review 29, no. 4: 479-510.
25. Pozo, Susan. 1992. "Conditional Exchange Rate Volatility and the Volume of International Trade: Evidence from the Early 1900s." Review of Economics and Statistics 74, no. 2: 325-29.
26. Sarantis, Nicholas. 1999. "Modeling Non-linearities in Real Effective Exchange Rates." Journal of International Money and Finance 18, no. 1: 27-45.
27. Sarno, Lucio, and Mark P. Taylor. 2002. "Purchasing Power Parity and the Real Exchange Rate." IMF Staff Papers 49, no. 1: 65-105.
28. Tsay, Ruey S. 2002. Analysis of Financial Time Series. New York: Wiley.
29. Tomlin, KaSaundra M. 2000. "The Effects of Model Specification on Foreign Direct Investment Models: An Application of Count Data Models." Southern Economic Journal 67, no. 2: 460-68.
30. Zhang, Kevin Honglin. 2001. "What Attracts Foreign Multinational Corporations to China?" Contemporary Economic Policy 19, no. 3: 336-46.