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Exchange Rate Strategies in the Competition for Attracting FDI Author info | Abstract | Publisher info | Download info | Related research | Statistics Benassy-Quere, A.
Fontagne, L.
Lahreche-Revil, A.
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registered author(s):
Building on the needs for long term capital inflows in developing countries, this paper reconsiders the choice of an exchange-rate regime by integrating the determinants of multinational firms locations. The trade-off between price competitiveness and a stable nominal exchange rate is modeled. It is shown that exchange rate volatility is detrimental to foreign direct investment and that its impact compares with misalignments. The main result is that the building of currency blocks could be a way of increasing FDI to emerging countries as a whole. The frontiers of monetary areas would then be strongly influenced by geography, as FDI is.
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Paper provided by Université Panthéon-Sorbonne (Paris 1) in its series Papiers d'Economie Mathématique et Applications with number
2000.07.
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Length: 25 pages
Date of creation: 2000Date of revision:
Handle: RePEc:fth:pariem:2000.07Contact details of provider: Postal: France; Universite de Paris I - Pantheon- Sorbonne, 12 Place de Pantheon-75005 Paris, France Web page: http://cermsem.univ-paris1.fr/ More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Thomas Krichel).
Keywords: FOREIGN INVESTMENTS ; EXCHANGE RATE ; MONETARY POLICY ; Other versions of this item:
Find related papers by JEL classification: F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business F31 - International Economics - - International Finance - - - Foreign Exchange F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
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Isabel Ruiz, 2005.
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0511016, EconWPA.
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"Le Currency Board : les contraintes de financement et d'ajustement de la convertibilité intégrale ,"
LATEC - Document de travail - Economie (1991-2003)
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Loic Cadiou & Julien Genet & Jean-Louis Guerin, 2002.
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