Arbeitspapier
Exchange rates and FDI: Goods versus capital market frictions
Economic theory provides two main explanations why changes in exchange rates can affect foreign direct investment (FDI). According to a first explanation, FDI reacts to exchange rate changes if there are information frictions on capital markets and if the investment by firms depends on their net worth (capital market friction hypothesis). According to a second explanation, FDI reacts to exchange rate changes if output and factor markets are segmented, and if firm-specific assets are important (goods market friction hypothesis). We provide a unified theoretical framework of the two explanations and test the model using German sectoral data derived from detailed firm-level data. We find greater support for the goods market friction hypothesis.
- Sprache
-
Englisch
- Erschienen in
-
Series: Tübinger Diskussionsbeiträge ; No. 304
- Klassifikation
-
Wirtschaft
Foreign Exchange
Multinational Firms; International Business
International Investment; Long-term Capital Movements
- Thema
-
FDI
exchange rates
net worth effects
multinational firms
Wechselkurs
Direktinvestition
Multinationales Unternehmen
Unvollkommener Markt
Theorie
Deutschland
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Buch, Claudia M.
Kleinert, Jörn
- Ereignis
-
Veröffentlichung
- (wer)
-
Eberhard Karls Universität Tübingen, Wirtschaftswissenschaftliche Fakultät
- (wo)
-
Tübingen
- (wann)
-
2006
- Handle
- URN
-
urn:nbn:de:bsz:21-opus-24374
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Buch, Claudia M.
- Kleinert, Jörn
- Eberhard Karls Universität Tübingen, Wirtschaftswissenschaftliche Fakultät
Entstanden
- 2006
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