EFFECTS OF REAL EXCHANGE RATE ON FOREIGN DIRECT INVESTMENT BY USING GRAVITY MODEL IN LATIN AMERICA AND CARIBBEAN

Martin Kocúrek ()
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Martin Kocúrek: Faculty of National Economy, University of Economics in Bratislava

Almanach (Actual Issues in World Economics and Politics), 2017, vol. 12, issue 4, 26-44

Abstract: This paper analyses the issue of RER and its impact on FDI by using gravity model of FDI. Firstly, we provide critical analysis of previous studies that performed research on determinants of FDI in LAC and the relation of the Ownership-Location-Internalisation Paradigm and the Investment Development Path within the Gravity Model of the FDI. We performed research on a sample of eight high-income, OECD member states and eight countries from LAC region. Econometric model was constructed and performed Pooled Ordinary Least Squares (POLS) regression, Fixed Effect and Random Effect regression. The impact of RERs differs with respect to the used panel data estimator.

Keywords: real exchange rates; bilateral FDI flow; gravity model; FDI; Latin America and Caribbean; non-stationary panel data (search for similar items in EconPapers)
JEL-codes: C33 F10 F21 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:brv:almnch:v:10:y:2017:i:4:p:26-44

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