Location of Repository

The effect of the exchange rates on investment in Mexican manufacturing industry

By Mustafa Caglayan and Rebeca I. Munoz-Torres

Abstract

This paper, considering revenue and cost exposure channels, investigates the effects of exchange rate behaviour on fixed capital investment in Mexican manufacturing sector over 1994-2002. We find that i) currency depreciation has a positive (negative) effect on fixed investment through the export (import) channel; ii) exchange rate volatility impacts mostly export oriented sectors; iii) the sensitivity of investment to exchange rate movements is stronger in non-durable goods sectors and industries with low mark-up ratios

Topics: HG
Publisher: University of Warwick, Department of Economics
Year: 2008
OAI identifier: oai:wrap.warwick.ac.uk:1369

Suggested articles

Preview

Citations

  1. (1983). Optimal Investment under Uncertainty, doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.