EconPapers    
Economics at your fingertips  
 

Common currencies and FDI flows

Stefano Schiavo

Post-Print from HAL

Abstract: The paper investigates the impact of EMU on foreign direct investment flows. Using the option value approach to investment decisions, it is possible to show that exchange rate uncertainty hinders cross-border investment flows. By permanently fixing bilateral exchange rates, a currency union can then be expected to spur international investment. Results from a gravity model on a sample of OECD countries confirm the hypothesis that currency unions have a positive impact on FDI; moreover, adopting the same currency appears to do more than merely eliminating exchange rate volatility. These findings closely resemble those recently obtained in the trade literature.

Date: 2007-06
References: Add references at CitEc
Citations: View citations in EconPapers (24)

Published in Oxford Economic Papers, 2007, 59 (3), pp.536 - 560

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Common currencies and FDI flows (2007) Downloads
Working Paper: Common currencies and FDI flows (2007)
Working Paper: Common Currencies and FDI Flows (2005) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03399427

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2025-03-31
Handle: RePEc:hal:journl:hal-03399427