Short- and long-run exchange rate volatility and FDI

A dynamic panel study of transition economies

Dados Bibliográficos

ID9403940
AutoresSuzana Balaban (0000-0001-8132-9120, Faculty of Finance, Banking and Audit, Alfa BK University, Bulevar maršala Tolbuhina 8, 11070, Beograd, Serbia), Marko Milić (0009-0005-6077-810X, Independent University in Banja Luka, Bosnia and Herzegovina), Marko Milošević (0009-0008-1389-8469, College of Business Services in Sokolac, Bosnia and Herzegovina)
Ano2025
Volume75
Fascículo1
Páginas1-18
Data de publicação2025-03-28
Peer ReviewedSim
Open AccessNão
TipoARTICLE
PeriódicoActa Oeconomica (JOURNAL)
Identificadores do periódicoISSN: 0001-6373 • E-ISSN: 1588-2659
EditoraAkadémiai Kiadó (PUBLISHER • HU)
DOI10.1556/032.2025.00001
OpenAlexW4408938259
IdiomaEN
Referências citadas10

The paper decomposes the real and nominal exchange rate volatility using the component GARCH specification to examine their impact on foreign direct investment (FDI) in 23 transition economies at aggregated and disaggregated levels. The paper employs instrumental variables within the SYS-GMM estimation procedure to provide the results' reliability and consistency. According to the results, the impact of long-run real exchange rate volatility on FDI differs among economic activities. These findings may be explained by the fact that the key motives of foreign investors entering the manufacturing sector will likely differ from those of foreign investors entering the financial intermediation or transport and communication sector. On the other hand, the short-run real exchange rate volatility and the long- and short-run nominal exchange rate volatility are not significant determinants of FDI in the transition economies covering the period from 2000 to 2023

Econometrics · Economics · Exchange rate · Foreign direct investment · Macroeconomics · Monetary economics · Panel data · Short run · Volatility (finance · Global Financial Crisis and Policies · Global trade and economics · Monetary Policy and Economic Impact