IDEAS home Printed from https://ideas.repec.org/p/wpa/wuwpit/0307001.html
   My bibliography  Save this paper

EXCHANGE RATES AND INVESTMENT BY MULTINATIONAL CORPORATIONS: A Firm-Level Test of the Imperfect Capital Markets Result

Author

Listed:
  • Peter R. Crabb

    (Northwest Nazarene University)

Abstract

The real value of the U.S. dollar and the level of U.S. foreign direct investment (FDI) have shown a strong correlation since the 1970s. Previous empirical studies on this relationship use primarily national or industry level data. This study uses firm-level data to test the hypothesis that exchange rates affect investment decisions of corporations by affecting the foreign currency value of their internal wealth. Implications from this model of firm behavior are tested using firm-level and geographically detailed data from U.S. national and multinational corporations. The results are inconsistent with the wealth effect explanation of FDI.

Suggested Citation

  • Peter R. Crabb, 2003. "EXCHANGE RATES AND INVESTMENT BY MULTINATIONAL CORPORATIONS: A Firm-Level Test of the Imperfect Capital Markets Result," International Trade 0307001, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpit:0307001
    Note: Type of Document - Word; prepared on IBM; to print on HP;
    as

    Download full text from publisher

    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/it/papers/0307/0307001.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Star, Spencer, 1974. "Accounting for the Growth of Output," American Economic Review, American Economic Association, vol. 64(1), pages 123-135, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Athanasoglou, Panayiotis P. & Georgiou, Evangelia A. & Staikouras, Christos C., 2009. "Assessing output and productivity growth in the banking industry," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(4), pages 1317-1340, November.
    2. Thirtle, Colin, 1986. "Problems in the Definition and Measurement of Technical Change and Productivity Growth in the U.K. Agricultural Sector," Manchester Working Papers in Agricultural Economics 232790, University of Manchester, School of Economics, Agricultural Economics Department.
    3. Strappazzon, Loris & Soligo, James & Eigenraam, Mark & Stoneham, Gary, 1999. "Using Productivity Measurement To Calculate The Benefits Of Research," 1999 Conference (43th), January 20-22, 1999, Christchurch, New Zealand 171902, Australian Agricultural and Resource Economics Society.
    4. W. Erwin Diewert, 1980. "Aggregation Problems in the Measurement of Capital," NBER Chapters, in: The Measurement of Capital, pages 433-538, National Bureau of Economic Research, Inc.
    5. Robert Halborsen, 1977. "Industrial Demand for Energy," NBER Working Papers 0166, National Bureau of Economic Research, Inc.
    6. Ian Black, 2003. "Community Perceptions of Unmeasured Quality Improvement in Goods and Services," Microeconomics 0307003, University Library of Munich, Germany, revised 03 Jul 2003.
    7. Frank Gollop & Dale Jorgenson, 1980. "US Productivity Growth by Industry, 1947–73," NBER Chapters, in: New Developments in Productivity Measurement and Analysis, pages 15-136, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Multinational Firms; Foreign Exchange;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpit:0307001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: EconWPA (email available below). General contact details of provider: https://econwpa.ub.uni-muenchen.de .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.