scholarly journals Impact of the Exchange Rate and Price Volatility on FDI Inflows: Case of Morocco and Turkey

2019 ◽  
Vol 6 (3) ◽  
pp. 87
Author(s):  
Azzouzi Asmae ◽  
Bousselhami Ahmed
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Exchange Rate Volatility ◽  
Price Volatility ◽  
Fdi Inflows ◽  
Turkish Government ◽  
The Exchange Rate ◽  
The Impact ◽  
Positive Effect ◽  
Real Exchange Rate Volatility

This paper aims to examine empirically the impact of price and real exchange rate volatility on Foreign Direct Investment (FDI) inflows. The sample used is based on the Mediterranean countries of Morocco and Turkey for the period 1990-2017. Empirical findings for Morocco revealing that in both short and long-terms, real exchange rate volatility is negative and highly significant. Price volatility depicts a positive effect, which means that greater volatility of inflation may cause greater marginal profitability of capital and hence increase investment. On the other hand, for Turkey, FDI inflows are found more elastic to domestic price fluctuations. The exchange rate volatility, instead, turned out to have a positive but insignificant effect. In addition, we found that the potential market size rate, institution quality, and infrastructure appear to be the key factors in attracting foreign capital in both countries. As for trade openness, a positive effect on FDI flows is only perceptible in Morocco. In addition, the series of structural reforms carried out by Turkish government have generated real benefits for foreign investors by creating the adequate environment. This has allowed Turkey to overcome the problems it was facing in attracting foreign investment during the period analysed.

The effects of real exchange rate volatility on sectoral export flows under intermediate and flexible exchange rate regimes: Empirical evidence from Turkey

2018 ◽  
Vol 4 (10) ◽  
pp. 172-184
Author(s):  
Bahar Erdal
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Exchange Rate Regime ◽  
Exchange Rate Regimes ◽  
Exchange Rate Volatility ◽  
Flexible Exchange Rate ◽  
Long Run ◽  
Short Run ◽  
The Impact ◽  
Real Exchange Rate Volatility

The aim of this paper is to analyse empirically the effects of real exchange rate volatility on sectoral exports in Turkey under intermediate and flexible exchange rate regimes. The cointegration test and error correction models are used to test the long-run relationship and short-run effects, respectively. The estimation results show that the real exchange rate volatility has negative and significant effects on sectoral exports in both intermediate and flexible exchange rate regimes. These empirical results are consistent with the theory. However, the impact of real exchange rate and foreign income appeared to be quite different for the two exchange rate regimes. Further, research is required to analyse the impacts of real exchange rate and foreign income on sectoral exports. Keywords: Real exchange rate volatility, real exchange rate, intermediate exchange rate regime, flexible exchange rate regime, sectoral export.

scholarly journals PENGARUH VOLATILITAS NILAI TUKAR TERHADAP PERTUMBUHAN EKONOMI INDONESIA

2008 ◽  
Vol 10 (3) ◽  
Author(s):  
Sri Liani Suselo ◽  
Hilde Dameria Sihaloho ◽  
Tarsidin Tarsidin
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Negative Impact ◽  
Aggregate Demand ◽  
Exchange Rate Volatility ◽  
Nominal Exchange Rate ◽  
The Other ◽  
The Exchange Rate ◽  
The Impact ◽  
Real Exchange Rate Volatility

This paper investigates the impact of the exchange rate volatility on the economic growth in Indonesia. The model applied considers both the aggregate demand and the aggregate supply interaction and the impact of the exchange rate volatility channeled through the investment and trade.The result shows the negative impact of the exchange rate volatility either in nominal or in real, on the economic growth. Both nominal and real exchange rate volatility dampens the investment. However, the nominal exchange rate volatility lowers import while the real one lowers export and at the other side boosts import.Keywords: Economic growth, exchange rate.JEL Classification: F31, O11, O40

scholarly journals Impact of Oil Price Shocks and Exchange Rate Volatility on Stock Market Behavior in Nigeria

2016 ◽  
Vol 7 (2) ◽  
pp. 171 ◽  
Author(s):  
Adedoyin I. Lawal ◽  
Russel O. C Somoye ◽  
Abiola A. Babajide
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Exchange Rate Volatility ◽  
Price Volatility ◽  
Oil Price ◽  
Market Volatility ◽  
Stock Market Volatility ◽  
Oil Price Volatility ◽  
The Exchange Rate ◽  
The Impact

The impact of exchange rate and oil prices fluctuation on the stock market has been a subject of hot debate among researchers. This study examined the impact of both the exchange rate volatility and oil price volatility on stock market volatility in Nigeria, so as to guide policy formulation based on the fact that the nation’s economy was foreign induced and mono-cultured with heavy dependence on oil. EGARCH estimation techniques were employed to examine if either the volatility in exchange rate, oil price volatility or both experts on stock market volatility in Nigeria. The result shows that share price volatility is induced by both the exchange rate volatility and oil price volatility. Thus, it is recommended that policymakers should pursue policies that tend to stabilize the exchange rate regime on the one hand, and guarantee the net oil exporting position for the economy, that market practitioners should formulate portfolio strategies in such a way that volatility in both exchange rates and oil price will be factored in time when investment decisions are being made.

scholarly journals Elections and The Real Exchange Rate Volatility In Turkey (1992-2014)

2016 ◽  
Author(s):  
Cevat Gerni ◽  
Özge Buzdağlı ◽  
Dilek Özdemir ◽  
Ömer Selçuk Emsen
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Exchange Rate Regime ◽  
Exchange Rate Volatility ◽  
The Real ◽  
General Elections ◽  
The Impact ◽  
Political Variables ◽  
Ruling Party ◽  
Real Exchange Rate Volatility

Sudden fluctuations that occur as results of politicians’ manipulation on the macroeconomic variables during the election period are called as Political Business Cycle. In recent years, exchange rate also has become an important subject of many studies in this framework. Before the elections, to gain the public’s votes, politicians firstly put pressure on the exchange rates to prevent currency depreciation, and then this can lead to manipulative fluctuations. In this respect, during the 1992:01-2014:12 periods in Turkey, the impact of the entire local and general elections on the real exchange rate volatility is examined using E-GARCH method. On the other hand, political variables such as independence of Central Bank, exchange rate regime, the number of representatives of the ruling party in the parliament and coalition are included to the model while the pre and after election period from the 1st to the 6th month as dummy variables. Based on the results of the analysis, it can be said that the elections and the political variables affect the real exchange rate and its volatility in Turkey. However, there is no significant evidence whether the politicians act opportunistic behavior to be reelected. Since the uncertainty during the election period cause outflow of the capital and deferral of the investment decisions of the investors until after the election, it may well be said that the politicians fail to influence the real exchange rate for their self-interests.

scholarly journals FDI Inflows, Price and Exchange Rate Volatility: New Empirical Evidence from Latin America

2016 ◽  
Author(s):  
Silvia Dal Bianco ◽  
Loan Nguyen Cong To
Keyword(s):  
Human Capital ◽  
Exchange Rate ◽  
Latin American ◽  
Fixed Effects ◽  
Trade Openness ◽  
Exchange Rate Volatility ◽  
Price Volatility ◽  
Fdi Inflows ◽  
Negative Effect ◽  
The Impact

This paper investigates the impact of price and real exchange rate volatility on Foreign Direct Investment (FDI) inflows in a panel of 10 Latin American and Caribbean countries, observed between 1990 and 2012. Both price and exchange rate volatility series are estimated through the Generalized Autoregressive Conditional Heteroscedasticity model (GARCH). Our results, obtained employing the Fixed Effects estimator, confirm the theory of hysteresis and option value, in so far it is found a statistically significant negative effect of exchange rate volatility on FDI. Price volatility, instead, turns out to be positive but insignificant. Moreover, we show that human capital and trade openness are key for attracting foreign capital. From the policy perspective, our analysis suggests the importance of stabilization policies as well as the one of government credibility in promoting trade openness and human capital formation.

scholarly journals Estimation Of The Marshall-Lerner Condition For Namibia

2013 ◽  
Vol 12 (5) ◽  
pp. 511 ◽  
Author(s):  
Joel Hinaunye Eita
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Trade Balance ◽  
Vector Autoregression ◽  
Balance Of Payments ◽  
Trade Elasticities ◽  
World Income ◽  
The Exchange Rate ◽  
The Impact ◽  
Positive Effect

According to the Marshall-Lerner condition, the sum of trade elasticities should be greater than one for a change in exchange rate to have an impact on the countrys balance of payments. This paper applies cointegrated vector autoregression to empirically estimate the Marshall-Lerner condition in Namibia. The main purpose is to test the impact of change in exchange rate on the trade balance. The paper investigates if trade elasticities are high enough in order to justify a change in exchange rate as an appropriate policy to improve the trade balance of the balance payments. The results indicate that world income has a positive effect on exports, while real exchange rate appreciation discourages exports. Imports respond positively to both domestic income and real exchange rate appreciation. The results indicate that imports and exports respond significantly to a change in the exchange rate and suggest that Marshall-Lerner condition holds for Namibia.

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