Technology for Education and Learning pp 583-588 | Cite as
A Research on Impacts of Real Exchange Rate upon Foreign Direct Investment Based on VAR Model
Abstract
Based on the 1985-2009 time-series data and the traditional theory of international direct investment, by using co-integration analysis, vector error correction model and granger causality test, this paper study the real exchange rate impact on foreign direct investment with VAR model. The conclusions are as follows: factors affecting foreign direct investment include China’s real GDP and real wages, and the influence of the former than the latter. However, the influence of RMB exchange rate on foreign direct investment is weak. Based on the research results, at last the author gives the proposition to attract foreign direct investment.
Keywords
Real exchange rate Foreign direct investment Vector error correction model Co-integration analysis Granger testPreview
Unable to display preview. Download preview PDF.
References
- 1.Agnes, Lionel: Optimal investment under the uncertainty. American Economic Review 73, 123–130 (2001)Google Scholar
- 2.George: Foreign Direct Investment and Growth in EP and IS countries. The Economic Journal 106(434), 92–105 (1996)CrossRefGoogle Scholar
- 3.Brzozowski, M.: Goods Prices and Exchange Rate: What We Learned? Journal of Economic Literature 35, 1243–1272 (2003)Google Scholar
- 4.Aliber: Exchange Rate and Price. The American Economic Review 77, 93–106 (1983)Google Scholar
- 5.Gorg: Exchange Rate Dynamics Analysis in Developed countries. Journal of Political (03), 624–660 (2001)Google Scholar
- 6.Klein, Rosenger: The Theory of International Trade. In: Ellis, H.S. (ed.) A Survey of Contemporary Economics, Philadelphia, Blakiston (1994)Google Scholar
- 7.Crushman: Investigating Causal Relationships of Econometric Model and Gross-spectral Methods. Economist 37(3), 424–438 (1985)Google Scholar