Real Exchange Rate Uncertainty and Private Investment in Developing Countries
By L. Serven. 2002
128 citations recorded by the source corpus.
The author examines empirically the link between real exchange rate uncertainty and private investment in developing countries using a large cross country-time series data set. He builds a GARCH-based measure of real exchange rate volatility and finds that it has a strong negative impact on investment, after controlling for other standard investment determinants and taking into account their potential endogeneity. The impact of uncertainty is not uniform, however. There is some evidence of threshold effects, so that uncertainty only matters when it exceeds some critical level. In addition, the negative impact of real exchange rate uncertainty on investment is significantly larger in economies that are highly open and in those with less developed financial systems.
Subfields: Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/83e62b30f013946a3043f9af2bcc009fe64afb6f
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Economics and Econometrics
In Finance
Citations in the corpus
- Investment and Uncertainty in the G7 (2005, methodology): “Serven (2003) using GARCH measures of uncertainty, finds a negative and highly significant impact of real exchange rate uncertainty on private investment in a sample of developing countries, after controlling for standard investment determinants.”
- On the Causes and Effects of Exchange Rate Volatility on Economic Growth: Evidence from Ghana (2017, unknown): “…Doyle, 2001; Musila & Al-Zyoud, 2012; Tenreyro, 2007); inflation (Danjuma, Shuaibu, & Sa’id, 2013); investment (Fuentes, 2006; Kiyota & Urata, 2004; Serven, 2002), and more generally economic activity (Adewuyi & Akpokodje, 2013; Kandil, 2004) and growth (Danne, 2006; Holland et al. 2011;…”
- Short and Long Run Determinants of Private Investment in Argentina (2005, background): “However, an abrupt increment in the exposure to external competition in certain sectors can make them less attractive as a destination of new capital flows (Serven, 2002).”