Foreign direct investment and exchange rate uncertainty in South‐East Asia

Article

Gottschalk, S. and Hall, S. 2008. Foreign direct investment and exchange rate uncertainty in South‐East Asia. International Journal of Finance & Economics. 13 (4), pp. 349-359. https://doi.org/10.1002/ijfe.355
TypeArticle
TitleForeign direct investment and exchange rate uncertainty in South‐East Asia
AuthorsGottschalk, S. and Hall, S.
Abstract

We investigate the relationship between exchange rate volatility, exchange rate risk diversification and the location of foreign direct investment in the manufacturing industries of Indonesia, Malaysia, Philippines and Thailand. We found a strong role for the yen/dollar exchange rate in location decisions of the US and Japanese investors. There is evidence in the literature that Japanese firms invest in Asia to circumvent the appreciation of the yen. Our results show that the volatility of the yen and the correlation between local exchange rates and the yen are significant determinants of the US and Japanese investments in the region

KeywordsForeign direct investment; mean-variance analysis; exchange rate uncertainty; US and Japanese FDI in Asia; location of FDI
PublisherWiley
JournalInternational Journal of Finance & Economics
ISSN1076-9307
Electronic1099-1158
Publication dates
Online11 Sep 2007
Print16 Oct 2008
Publication process dates
Deposited15 Feb 2021
Accepted10 Sep 2007
Output statusPublished
Digital Object Identifier (DOI)https://doi.org/10.1002/ijfe.355
Web of Science identifierWOS:000260841200004
LanguageEnglish
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