Exchange Rate Implications for Australian Manufacturing Investment and Exports

Robyn Swift
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Robyn Swift: Griffith Business School, Griffith University, Nathan Queensland Australia

Economic Analysis and Policy, 2007, vol. 37, issue 2, 145-162

Abstract: This paper uses time series data on individual industries to examine the relationship between exchange rates and investment for Australian manufacturing. The results show that the investment response to exchange rate changes for the total manufacturing sector varies positively with the export share of sales and negatively with the imported input use, but most individual industries do not show similar effects. The level of import competition is not a significant influence for either the total manufacturing sector or for individual industries. Exchange rate effects are limited to investment in equipment plant and machinery, with little impact on investment in buildings and structures.

Keywords: Exchange Rate; Exports; Import; Investment; Manufacturing (search for similar items in EconPapers)
JEL-codes: F14 F31 G31 L60 (search for similar items in EconPapers)
Date: 2007
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