Foreign Direct Investment and Exchange Rate Pass-through: Access to Foreign Markets
AbstractWe examine the effects of foreign direct investment on exchange rate pass-through. By distinguishing the purpose of foreign direct investment, different hypothesis for production subsidiary and distribution subsidiary can be tested. We are able to find a clear evidence of “power-shift” effect and “elimination” effect of distribution subsidiary, with foreign direct investment data properly constructed to capture the timing of establishment. We also obtained significant downward effect of local production, conforming to the previous research.
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Bibliographic InfoPaper provided by Kyushu Sangyo University, Faculty of Economics in its series Discussion Papers with number 8.
Length: 15 pages
Date of creation: Feb 2001
Date of revision:
distribution subsidiary; exchange rate pass-through; foreign direct investment;
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
- L68 - Industrial Organization - - Industry Studies: Manufacturing - - - Appliances; Furniture; Other Consumer Durables
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