Exchange rate volatility and its impact on domestic investment
Mohsen Bahmani-Oskooee () and
Research in Economics, 2013, vol. 67, issue 1, 1-12
The relationship between exchange rate uncertainty and domestic investment has attracted some attention in macro literature. Previous studies that investigated the relation concentrated on firm level data with mixed results. In this paper we argue that the relationship applies equally at the aggregate. We assess the short-run and long-run effects of exchange rate volatility on domestic investment in each of the 36 countries in our sample using time-series data. The application of the bounds testing approach indicates that exchange rate volatility has significant short-run effects on domestic investment in 27 countries. The short-run effects are translated into the long-run only in 12 countries.
Keywords: Exchange rate volatility; Domestic investment; Bounds testing (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:67:y:2013:i:1:p:1-12
Access Statistics for this article
Research in Economics is currently edited by Federico Etro
More articles in Research in Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().