Exchange rate regimes and FDI flows to developing countries

Abbott, Andrew James and De Vita, Glauco and Cushman, David (2012) Exchange rate regimes and FDI flows to developing countries. Review of International Economics, 20 (1). pp. 95-107. ISSN 0965-7576

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Drawing on recent advances in exchange rate regime classifications, the paper examines empirically the effect of exchange rate regimes on foreign direct investment (FDI) flows to developing countries. Using system generalized methods of moments estimation on a panel of 70 developing countries for the period 1985–2004, we find that developing countries adopting de facto fixed or intermediate regimes significantly outperform those opting for a flexible exchange rate system in attracting FDI flows. No statistically significant differences in the FDI‐inducing properties of fixes, intermediates and floats are found using the International Monetary Fund official classification.

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Journal Article
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Review of International Economics
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31 Jan 2020 16:05
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16 Sep 2023 02:06