ON THE LINK BETWEEN REAL EXCHANGE RATE AND DOMESTIC INVESTMENT: ASYMMETRIC EVIDENCE FROM AFRICA

ON THE LINK BETWEEN REAL EXCHANGE RATE AND DOMESTIC INVESTMENT: ASYMMETRIC EVIDENCE FROM AFRICA

Exchange rate changes are said to affect the level of domestic direct investment in either direction. In this paper we consider the experience of each of the 18 countries in Africa. When a linear model is used, we find that the real effective exchange rate has significant short-run effects on domest...

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Veröffentlicht in:Journal of economic development 2019, 44(3), , pp.1-17
Hauptverfasser: Bahmani-Oskooee, Mohsen, Gelan, Abera
Format: Artikel
Sprache:eng
Schlagworte:
African literature
Economic activity
Economic growth
Emerging markets
Exports
Foreign exchange rates
GDP
Gross Domestic Product
Inflation rates
Interest rates
Prices
Studies
Variables
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Zusammenfassung:Exchange rate changes are said to affect the level of domestic direct investment in either direction. In this paper we consider the experience of each of the 18 countries in Africa. When a linear model is used, we find that the real effective exchange rate has significant short-run effects on domestic investment in three countries and long-run effects in five countries. However, when a nonlinear model was used, the number of countries rose to 13 and seven respectively. Furthermore, in almost all countries, the short-run and long-run effects were asymmetric.
ISSN:0254-8372