The Effect of the Exchange Rates on Investment in Mexican Manufacturing Industry
AbstractThis paper, considering revenue and cost exposure channels, investigates the effects of exchange rate behaviour on fixed capital investment in Mexican manufacturing sector over 1994-2002. We find that i) currency depreciation has a positive (negative) effect on fixed investment through the export (import) channel; ii) exchange rate volatility impacts mostly export oriented sectors ; iii) the sensitivity of investment to exchange rate movements is stronger in non-durable goods sectors and industries with low mark-up ratios.
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Bibliographic InfoArticle provided by Springer in its journal Open Economies Review.
Volume (Year): 22 (2011)
Issue (Month): 4 (September)
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Web page: http://www.springerlink.com/link.asp?id=100323
Exchange rate volatility; Investment; External exposure; Market structure; E22;
Other versions of this item:
- Caglayan, Mustafa & Muñoz Torres, Rebeca I., 2008. "The Effect of the Exchange Rates on Investment in Mexican Manufacturing Industry," The Warwick Economics Research Paper Series (TWERPS) 846, University of Warwick, Department of Economics.
- E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
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