EconPapers    
Economics at your fingertips  
 

Exchange Rates and Foreign Direct Investment: The Role of Mobility

Tore Ellingsen ()

No 59, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: Empirical evidence shows that a weak currency attracts foreign direct investment. Current conventional wisdom says that all firms, regardless of their nationality, should be affected equally by changes in the exchange rate, and hence that there is no simple explanation for this regularity. I show that this neutrality result holds only under the unreasonable assumption that all firms are equally mobile internaitonally, The simple explanation for the relationship between FDI and exchange rates is that, among firms located in a particular country, domestically owned firms are on average less mobile than firms owned by foreigners.

Keywords: Foreign direct investment; exchange rates; multinational firms; international mobility (search for similar items in EconPapers)
JEL-codes: F21 F23 (search for similar items in EconPapers)
Date: 1995-06
References: Add references at CitEc
Citations: Track citations by RSS feed

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

Related works:
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:hhs:hastef:0059

Access Statistics for this paper

More papers in SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Helena Lundin ().

 
Page updated 2019-07-12
Handle: RePEc:hhs:hastef:0059