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On The Link between Real Exchange Rate and Domestic Investment: Asymmetric Evidence from Africa

Mohsen Bahmani-Oskooee and Abera Gelan ()
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Mohsen Bahmani-Oskooee and Abera Gelan: University of Wisconsin-Milwaukee

Authors registered in the RePEc Author Service: Mohsen Bahmani-Oskooee ()

Journal of Economic Development, 2019, vol. 44, issue 3, 1-17

Abstract: Exchange rate changes are said to affect the level of domestic direct investment in either direction. In this paper we consider the experience of each of the 18 countries in Africa. When a linear model is used, we find that the real effective exchange rate has significant short-run effects on domestic investment in three countries and long-run effects in five countries. However, when a nonlinear model was used, the number of countries rose to 13 and seven respectively. Furthermore, in almost all countries, the short-run and long-run effects were asymmetric

Keywords: Domestic investment; Real exchange rate, Asymmetry analysis, Africa (search for similar items in EconPapers)
JEL-codes: F31 (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:jed:journl:v:44:y:2019:i:3:p:1-17