Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/59459
Authors: 
Clare, Gregory
Gang, Ira N.
Year of Publication: 
2009
Series/Report no.: 
Working Papers, Department of Economics, Rutgers, the State University of New Jersey 2009,03
Abstract: 
We examine the effects of exchange rate and political risks on foreign direct investment (FDI) for multinationals. Our strategy is to examine FDI by U.S. firms at two levels: in all industries and on the subset of only firms in manufacturing industries. When investing in developed economies the firms appear to take past and present variation in exchange rates into consideration. When investing in less developed nations the past and present variation does not appear to weigh as heavily as the present and future variation. Decreasing political risk increases FDI.
Subjects: 
exchange rates
foreign direct investment
uncertainty
JEL: 
F21
F31
Document Type: 
Working Paper

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