Foreign investment and real exchange rate volatility in emerging Asian countries

Almukhtar Al-Abri, Hamid Baghestani

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

This study asks whether greater foreign investment reduces real exchange rate volatility in eight emerging Asian countries. As a noteworthy aspect, we utilize detailed measures of foreign investment, including foreign direct investment, foreign portfolio equity, and foreign debt. Our findings from both time-series and panel data for the period 1980-2011 indicate that greater stocks of foreign liabilities reduced real exchange rate volatility for China, India, Malaysia, Singapore, and South Korea but increased real exchange rate volatility for Indonesia, the Philippines, and Thailand. We further examine the effects of several important factors on real exchange rate volatility for the two groups of countries separately.

Original languageEnglish
Pages (from-to)34-47
Number of pages14
JournalJournal of Asian Economics
Volume37
DOIs
Publication statusPublished - Apr 1 2015

Fingerprint

Emerging Asian countries
Foreign investment
Real exchange rate volatility
Equity
Malaysia
Philippines
Singapore
Liability
South Korea
Thailand
Panel data
Foreign debt
Indonesia
India
Factors
Foreign direct investment
China
Time series data

Keywords

  • Capital mobility
  • F21
  • F31
  • Risk-sharing
  • Trade

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Cite this

Foreign investment and real exchange rate volatility in emerging Asian countries. / Al-Abri, Almukhtar; Baghestani, Hamid.

In: Journal of Asian Economics, Vol. 37, 01.04.2015, p. 34-47.

Research output: Contribution to journalArticle

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