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Evidence on the impact of exchange rate regimes on bilateral FDI flows

Author

Listed:
  • Andrew J. Abbott
  • Glauco De Vita

Abstract

Purpose - The purpose of this paper is to investigate the impact of a menu of country-pair exchange rate regime combinations upon bilateral foreign direct investment (FDI) flows. Design/methodology/approach - The authors use panel data from 27 OECD and non-OECD high income countries for the period 1980 to 2003. Instrumental variable estimation of a dynamic panel model within a system generalised methods of moments framework allows us to control for both potential correlation issues and endogeneity bias. Findings - This paper finds that a currency union is the policy framework most conducive to cross-border investment. Being a member of EMU also appears to spur greater FDI flows with countries floating their currency Originality/value - The contribution is also distinguished by the comparative use of recently developed “natural” or

Suggested Citation

  • Andrew J. Abbott & Glauco De Vita, 2011. "Evidence on the impact of exchange rate regimes on bilateral FDI flows," Journal of Economic Studies, Emerald Group Publishing, vol. 38(3), pages 253-274, August.
  • Handle: RePEc:eme:jespps:v:38:y:2011:i:3:p:253-274
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    Citations

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    Cited by:

    1. Okafor, Godwin & Piesse, Jenifer & Webster, Allan, 2015. "The motives for inward FDI into Sub-Saharan African countries," Journal of Policy Modeling, Elsevier, vol. 37(5), pages 875-890.
    2. repec:ksp:journ2:v:4:y:2017:i:1:p:19-54 is not listed on IDEAS
    3. repec:eee:intfin:v:51:y:2017:i:c:p:142-154 is not listed on IDEAS
    4. repec:eee:jimfin:v:77:y:2017:i:c:p:143-163 is not listed on IDEAS
    5. Guo, Yan, 2013. "Strategic trade policy, cost uncertainty and FDI determinants," ISU General Staff Papers 201301010800004464, Iowa State University, Department of Economics.
    6. repec:eee:touman:v:45:y:2014:i:c:p:226-233 is not listed on IDEAS

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