Exchange Rate Volatility and FDI Inflows : Evidence from Cross-Country Panel Data

Hanusch, Marek ; Nguyen, Ha ; Algu, Yashvir

World Bank, Washington, DC

关键词: EXCHANGE RATES;    FOREIGN DIRECT INVESTMENT;    FDI;    CAPITAL FLOWS;    CURRENCY VOLATILITY;   

RP-ID  :  127042

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Using a panel of 80 developing anddeveloped countries for the period 1990-2015, thisstudyanalyses the relationship between exchange ratevolatility and foreign direct investment (FDI)inflows. Theresults reveal a negative relationship between de factoexchange rate volatility andFDI. Reducing exchange ratevolatility by 10 percent over one-year can boost FDIinflows—ceterisparibus—by an estimated 0.48 percentagepoints of GDP while the same reduction over the pastfiveyears can boost FDI inflows by 0.27 percentage points overthe long-run. The results areapplied to the case of SouthAfrica, which has been experiencing high volatility of therand inrecent years. Reducing the rand's volatility tothat of developing country peers, South Africa could boostFDI inflows by a potential of 0.25 percentage points of GDP.