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Foreign Investment in U.S. Cropland: Some Evidence on the Role of Exchange Rates, Interest Rates, and Returns on Cropland

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  • Kitchen, John
  • De Braal, J. Peter

Abstract

This paper empirically examines the role of exchange rates, cropland returns, and the real interest rate as determinants of foreign investment in U.S. cropland. Investments from the top six countries of origin were analyzed. Investments from Mexico were also examined because of that country's close physical proximity to the United States. The evidence presented suggests that foreign investment in U.S. cropland is negatively related to the value of the dollar and the level of U.S. real interest rates, and positively related to returns on U.S. cropland.

Suggested Citation

  • Kitchen, John & De Braal, J. Peter, 1989. "Foreign Investment in U.S. Cropland: Some Evidence on the Role of Exchange Rates, Interest Rates, and Returns on Cropland," Staff Reports 278248, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:278248
    DOI: 10.22004/ag.econ.278248
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    References listed on IDEAS

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    1. Husted, Steven & Kitchen, John, 1985. "Some Evidence on the International Transmission of U.S. Money Supply Announcement Effects," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 17(4), pages 456-466, November.
    2. Dornbusch, Rudiger, 1976. "Expectations and Exchange Rate Dynamics," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1161-1176, December.
    3. William J. Kahley, 1987. "Direct investment activity of foreign firms," Economic Review, Federal Reserve Bank of Atlanta, issue Sum, pages 36-51.
    4. Mussa, Michael, 1982. "A Model of Exchange Rate Dynamics," Journal of Political Economy, University of Chicago Press, vol. 90(1), pages 74-104, February.
    5. DeBraal, J. Peter, 1988. "Foreign Ownership Of U.S. Agricultural Land Through December 31, 1987," Staff Reports 278038, United States Department of Agriculture, Economic Research Service.
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