 Capital flows and real exchange rates in emerging Asian countriesJuthathip Jongwanich and Archanun Kohpaiboon Journal of Asian Economics, 2013, vol. 24, issue C, 138-146 Abstract: This paper examines the impact of capital flows on real exchange rates in emerging Asian countries during 2000–2009 using a dynamic panel-data model. The estimation results show that the composition of capital flow matters in determining the impact of the flows on real exchange rates. Other forms of capital flow, especially portfolio investment, bring in a faster speed of real exchange rate appreciation than foreign direct investment (FDI). However, the magnitude of appreciation among capital flows is close to each other. The increasing importance of merger and acquisition (M&A) activities in FDI in the region makes these flows behave closer to other forms of capital flow. The estimation results also show that during the estimation period, capital outflows bring about a greater degree of exchange rate adjustment than capital inflows. This evidence is found for all types of capital flow. All in all, the results indicate that the swift rebound of capital inflows into the region could result in excessive appreciation of (real) currencies, especially when capital inflows are in the form of portfolio investment. Keywords: Capital mobility; Real exchange rates and emerging Asian countries (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:24:y:2013:i:c:p:138-146 DOI: 10.1016/j.asieco.2012.10.006 Access Statistics for this article Journal of Asian Economics is currently edited by C. Wiemer More articles in Journal of Asian Economics from Elsevier |
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