The Effect of Currency Crises on Foreign Direct Investment Activity in Emerging Markets

Mohamed M. Soliman

Review of Applied Economics, 2005, vol. 01, issue 2, 18

Abstract: Despite the ample literature on currency crises, the effect of currency crises on foreign direct investment FDI activity has been largely unexamined. This paper tests the sensitivity of three measures of U.S. outbound non-bank FDI activity to currency crises in 21 emerging economies. The findings of this analysis suggest that contrary to the common perception, currency crises do not seem to have a negative effect on FDI activity in the crisis economy. Indeed, we find some evidence that currency crises may increase FDI activity in the affected country. These results underline the stable nature of FDI relative to other types of international capital flows and as a safer mode of financing for emerging economies.

Keywords: Financial Economics; International Relations/Trade (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://ageconsearch.umn.edu/record/50276/files/7-Mohamed%20M.%20Soliman.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:reapec:50276

DOI: 10.22004/ag.econ.50276

Access Statistics for this article

More articles in Review of Applied Economics from Lincoln University, Department of Financial and Business Systems Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().