TY - JOUR
T1 - Foreign investment and real exchange rate volatility in emerging Asian countries
AU - Al-Abri, Almukhtar
AU - Baghestani, Hamid
N1 - Publisher Copyright:
© 2015 Elsevier Inc.
PY - 2015/4/1
Y1 - 2015/4/1
N2 - 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.
AB - 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.
KW - Capital mobility
KW - F21
KW - F31
KW - Risk-sharing
KW - Trade
UR - http://www.scopus.com/inward/record.url?scp=84923037515&partnerID=8YFLogxK
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U2 - 10.1016/j.asieco.2015.01.005
DO - 10.1016/j.asieco.2015.01.005
M3 - Article
AN - SCOPUS:84923037515
SN - 1049-0078
VL - 37
SP - 34
EP - 47
JO - Journal of Asian Economics
JF - Journal of Asian Economics
ER -