EconPapers    
Economics at your fingertips  
 

Impact of exchange rate and exchange rate volatility on foreign direct investment inflow for Mauritius: A dynamic time series approach

Warren Moraghen, Boopen Seetanah and Noor Sookia

African Development Review, 2021, vol. 33, issue 4, 581-591

Abstract: Studies focusing on the determinants of foreign direct investment (FDI) inflow to Sub‐Saharan African countries remain fairly limited. Such existing research mostly focuses on the level of the exchange rate, often ignoring its volatility. This paper assesses the impact of the real exchange rate and exchange rate volatility on FDI flows for the case of Mauritius, one of the best economic performers on the continent. Using dynamic time series analysis, namely a Vector Error Correction Model, over the period 1976–2018, exchange rate volatility was found to negatively impact FDI while depreciating real exchange attracts foreign investors. The openness level, wages, literacy level and tax are also observed to be ingredients of FDI in both the long and short term. Moreover, the analysis validates the dynamic nature of FDI in Mauritius.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/1467-8268.12596

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:bla:afrdev:v:33:y:2021:i:4:p:581-591

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1017-6772

Access Statistics for this article

African Development Review is currently edited by John C. Anyanwu, Hassan Aly and Kupukile Mlambo

More articles in African Development Review from African Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2022-02-19
Handle: RePEc:bla:afrdev:v:33:y:2021:i:4:p:581-591