IDEAS home Printed from https://ideas.repec.org/a/cai/recosp/reco_574_0771.html
   My bibliography  Save this article

Investissements directs américains et européens dans les PECOs. Quel rôle des effets de change ?

Author

Listed:
  • Christian Aubin
  • Jean-Pierre Berdot
  • Daniel Goyeau
  • Jacques Léonard

Abstract

This paper first reviews the mainstream literature concerning the explanatory factors of fdis in the ceecs and specifically the exchange rate effects. We then present an empirical analysis of medium and long term exchange rate effects over the period 1995/2002, comparing us and eu investors behaviours. As regards the dynamics of fdis in the ceecs, the empirical results confirm the standard literature: two behavioural logics seem to appear and these are differently weighted for us and eu investors. If European fdi mainly aims at entering a foreign market, the American one also aims at relocating production so as to reexport the product to the domestic market. Notwithstanding the impact of exchange rate seems to be less obvious. Neither the level nor the volatility of the exchange rate appear to be significant; and neither is the de jure exchange rate regime. Nevertheless, an index of the de facto exchange regime is quite relevant. It is worth noting that in the case of ceecs the problem of exchange rate risk is specific: in the long run, the pegging of their currencies to the euro will become harder and harder before they join the European single currency. So, exchange rate effects may be altered throughout the transition process towards monetary union. Classification JEL : F21, F31, F36

Suggested Citation

  • Christian Aubin & Jean-Pierre Berdot & Daniel Goyeau & Jacques Léonard, 2006. "Investissements directs américains et européens dans les PECOs. Quel rôle des effets de change ?," Revue économique, Presses de Sciences-Po, vol. 57(4), pages 771-792.
  • Handle: RePEc:cai:recosp:reco_574_0771
    as

    Download full text from publisher

    File URL: http://www.cairn.info/load_pdf.php?ID_ARTICLE=RECO_574_0771
    Download Restriction: free

    File URL: http://www.cairn.info/revue-economique-2006-4-page-771.htm
    Download Restriction: free
    ---><---

    References listed on IDEAS

    as
    1. Jaap Bos & Mindel van de Laar, 2004. "Explaining Foreign Direct Investment in Central and Eastern Europe: an Extended Gravity Approach," DNB Working Papers 008, Netherlands Central Bank, Research Department.
    2. Jeffrey R. Shafer & Bonnie E. Loopesko, 1983. "Floating Exchange Rates after Ten years," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 14(1), pages 1-86.
    3. Klein, Michael W. & Rosengren, Eric, 1994. "The real exchange rate and foreign direct investment in the United States : Relative wealth vs. relative wage effects," Journal of International Economics, Elsevier, vol. 36(3-4), pages 373-389, May.
    4. Benassy-Quere, AgnEs & Fontagne, Lionel & LahrEche-Revil, Amina, 2001. "Exchange-Rate Strategies in the Competition for Attracting Foreign Direct Investment," Journal of the Japanese and International Economies, Elsevier, vol. 15(2), pages 178-198, June.
    5. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    6. Laura Resmini, 2000. "The Determinants of Foreign Direct Investment in the CEECs: New evidence from sectoral patterns," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(3), pages 665-689, November.
    7. Weymark, Diana N, 1997. "Measuring the degree of exchange market intervention in a small open economy," Journal of International Money and Finance, Elsevier, vol. 16(1), pages 55-79, February.
    8. Bruce A. Blonigen, 2019. "Firm-Specific Assets and the Link Between Exchange Rates and Foreign Direct Investment," World Scientific Book Chapters, in: Foreign Direct Investment, chapter 3, pages 89-120, World Scientific Publishing Co. Pte. Ltd..
    9. Nikolina Kosteletou & Panagiotis Liargovas, 2000. "Foreign Direct Investment and Real Exchange Rate Interlinkages," Open Economies Review, Springer, vol. 11(2), pages 135-148, April.
    10. Kogut, Bruce & Chang, Sea Jin, 1996. "Platform Investments and Volatility Exchange Rates: Direct Investment in the U.S. by Japanese Electronic Companies," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 221-231, May.
    11. Joshua Aizenman, 1992. "Exchange Rate Flexibility, Volatility, and Domestic and Foreign Direct Investment," IMF Staff Papers, Palgrave Macmillan, vol. 39(4), pages 890-922, December.
    12. Baek, In-Mee & Okawa, Tamami, 2001. "Foreign exchange rates and Japanese foreign direct investment in Asia," Journal of Economics and Business, Elsevier, vol. 53(1), pages 69-84.
    13. repec:nsr:niesrd:43 is not listed on IDEAS
    14. Gregory K. Bell & José M. Campa, 1997. "Irreversible Investments And Volatile Markets: A Study Of The Chemical Processing Industry," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 79-87, February.
    15. Barrell, Ray & Pain, Nigel, 1998. "Real Exchange Rates, Agglomerations, and Irreversibilities: Macroeconomic Policy and FDI in EMU," Oxford Review of Economic Policy, Oxford University Press, vol. 14(3), pages 152-167, Autumn.
    16. Ms. Hélène Poirson, 2001. "How Do Countries Choose their Exchange Rate Regime?," IMF Working Papers 2001/046, International Monetary Fund.
    17. Patrick Artus & André Cartapanis & Florence Legros (ed.), 2005. "Regional Currency Areas in Financial Globalization," Books, Edward Elgar Publishing, number 3347.
    18. Schwieren, C.A.A. & Vendrik, M.C.M. & de Gijsel, P.P., 2004. "The power of competition: reducing or reinforcing discrimination?," Research Memorandum 041, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    19. John Dunning, 1981. "Explaining the international direct investment position of countries: Towards a dynamic or developmental approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 117(1), pages 30-64, March.
    20. Franke, Gunter, 1991. "Exchange rate volatility and international trading strategy," Journal of International Money and Finance, Elsevier, vol. 10(2), pages 292-307, June.
    21. Holden, Paul & Holden, Merle & Suss, Esther C, 1979. "The Determinants of Exchange Rate Flexibility: An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 61(3), pages 327-333, August.
    22. Nigel Pain & Dawn Holland, 1998. "The Diffusion Of Innovations In Central And Eastern Europe: A Study Of The Determinants And Impact O," National Institute of Economic and Social Research (NIESR) Discussion Papers 137, National Institute of Economic and Social Research.
    23. Campa, Joe Manuel, 1993. "Entry by Foreign Firms in the United States under Exchange Rate Uncertainty," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 614-622, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Albulescu, Claudiu Tiberiu & Ionescu, Adrian Marius, 2018. "The long-run impact of monetary policy uncertainty and banking stability on inward FDI in EU countries," Research in International Business and Finance, Elsevier, vol. 45(C), pages 72-81.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matthias Busse & Carsten Hefeker & Signe Nelgen, 2013. "Foreign Direct Investment and Exchange Rate Regimes," Economics Bulletin, AccessEcon, vol. 33(1), pages 843-858.
    2. Lee, Bong-Soo & Min, Byung S., 2011. "Exchange rates and FDI strategies of multinational enterprises," Pacific-Basin Finance Journal, Elsevier, vol. 19(5), pages 586-603, November.
    3. Warren Moraghen & Boopen Seetanah & Noor Sookia, 2021. "Impact of exchange rate and exchange rate volatility on foreign direct investment inflow for Mauritius: A dynamic time series approach," African Development Review, African Development Bank, vol. 33(4), pages 581-591, December.
    4. Chia‐Ching Lin & Kun‐Ming Chen, 2022. "Market competition, exchange rate uncertainty, and foreign direct investment," Review of Development Economics, Wiley Blackwell, vol. 26(1), pages 405-422, February.
    5. Phillips, Shauna & Ahmadi-Esfahani, Fredoun Z., 2008. "Exchange Rates and Foreign Direct Investment: Theoretical Models and Empirical Evidence," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), pages 1-21.
    6. Syarifuddin, Ferry, 2020. "The Dynamics of Foreign Direct Investment and Exchange Rates: An Interconnection Approach in ASEAN," MPRA Paper 104596, University Library of Munich, Germany.
    7. Chiara Franco & Francesco Rentocchini & Giuseppe Vittucci Marzetti, 2008. "Why do firms invest abroad? An analysis of the motives underlying Foreign Direct Investments," Department of Economics Working Papers 0817, Department of Economics, University of Trento, Italia.
    8. Osinubi, T. S. & Amaghionyeodiwe, L. A, 2009. "Foreign Direct Investment and Exchange Rate Volatility in Nigeria," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 9(2).
    9. Shauna Phillips & Fredoun Z. Ahmadi-Esfahani, 2008. "Exchange rates and foreign direct investment: theoretical models and empirical evidence ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(4), pages 505-525, December.
    10. Rajesh Chakrabarti & Barry Scholnick, 2002. "Exchange rate expectations and foreign direct investment flows," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(1), pages 1-21, March.
    11. Benjamin N. Dennis & Christopher A. Laincz & Lei Zhu, 2008. "Which Exchange Rates Matter for FDI? Evidence for Japan," Southern Economic Journal, John Wiley & Sons, vol. 75(1), pages 50-68, July.
    12. Yao, Shujie & Wang, Pan, 2014. "Has China displaced the outward investments of OECD countries?," China Economic Review, Elsevier, vol. 28(C), pages 55-71.
    13. Zainab Jehan & Azooba Hamid, 2017. "Exchange rate volatility and capital inflows: role of financial development," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 16(3), pages 189-203, December.
    14. Todd Sarnstrom & Michael Ryan, 2023. "Third‐country exchange rate effects on foreign direct investment flows: A global vector autoregessive approach," Review of International Economics, Wiley Blackwell, vol. 31(2), pages 522-549, May.
    15. Shi Li & Hironobu Nakagawa, 2022. "Exchange rates and foreign direct investment: Evidence from Chinese firm‐level data," The World Economy, Wiley Blackwell, vol. 45(9), pages 2902-2923, September.
    16. Takagi, Shinji & Shi, Zongying, 2011. "Exchange rate movements and foreign direct investment (FDI): Japanese investment in Asia, 1987–2008," Japan and the World Economy, Elsevier, vol. 23(4), pages 265-272.
    17. Schmidt, Christian W. & Broll, Udo, 2008. "The effect of exchange rate risk on U.S. foreign direct investment: An empirical analysis," MPRA Paper 10713, University Library of Munich, Germany.
    18. Warren Moraghen & Boopen Seetanah & Noor Sookia, 2019. "Explaining Heterogeneity in the Effect of the Exchange Rate and Exchange Rate Volatility on Foreign Direct Investment: A Meta‐Analysis Approach," African Development Review, African Development Bank, vol. 31(3), pages 275-291, September.
    19. Nigel Pain & Desirée Van Welsum, 2003. "Untying The Gordian Knot: The Multiple Links Between Exchange Rates and Foreign Direct Investment," Journal of Common Market Studies, Wiley Blackwell, vol. 41(5), pages 823-846, December.
    20. Christian Schmidt & Udo Broll, 2009. "Real exchange-rate uncertainty and US foreign direct investment: an empirical analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(3), pages 513-530, October.

    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cai:recosp:reco_574_0771. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jean-Baptiste de Vathaire (email available below). General contact details of provider: https://www.cairn.info/revue-economique.htm .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.