Foreign direct investment, trade and real exchange rate linkages in Southeast Asia and Latin America
By: Linda S. Goldberg, Michael W. Klein.
Contributors: Klein, Michael W., 1958-; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 6344; Working paper series (National Bureau of Economic Research) -- working paper no. 6344.
Publisher: National Bureau of Economic Research
Published: 1997
Place of publication: Cambridge, MA
Language: eng
Number of pages: 41
Subjects: Investments, Foreign -- Southeast Asia.; Investments, Foreign -- Latin America.; Foreign exchange rates -- Southeast Asia.; Foreign exchange rates -- Latin America.; Southeast Asia -- Commerce.; Latin America -- Commerce.
Description: We investigate the relationships among trade, foreign direct investment and the real exchange rate between a set of Southeast Asian and Latin American countries and both the United States and Japan. Foreign direct investment by both Japan and the United States to the Southeast Asian countries in our sample is significantly affected by bilateral real exchange rates. Also, trade between the countries in our sample and the United States and Japan is significantly affected by foreign direct investment. These sets of relationships, between the real exchange rate and foreign direct investment, and between foreign direct investment and trade, support two channels through which the real exchange rate affects trade: a direct effect on the relative price of goods and an indirect effect through foreign direct investment.
Notes: "December 1997."

JEL no. F21, F14.

Includes bibliographical references (p. 25-27).

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