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 InfoPaper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 846.
Length: 20 pages
Date of creation: 2008
Date of revision:
Exchange rate volatility ; investment ; external exposure ; market structure;
Other versions of this item:
- Mustafa Caglayan & Rebeca Muñoz Torres, 2011. "The Effect of the Exchange Rates on Investment in Mexican Manufacturing Industry," Open Economies Review, Springer, vol. 22(4), pages 669-683, September.
- E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-04 (All new papers)
- NEP-IFN-2008-04-04 (International Finance)
- NEP-MAC-2008-04-04 (Macroeconomics)
- NEP-OPM-2008-04-04 (Open Economy Macroeconomic)
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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