The effect of the exchange rates on investment in Mexican manufacturing industry
Caglayan, Mustafa and Munoz-Torres, Rebeca I. (2008) The effect of the exchange rates on investment in Mexican manufacturing industry. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.846).
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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.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HG Finance|
|Divisions:||Faculty of Social Sciences > Economics|
|Library of Congress Subject Headings (LCSH):||Foreign exchange rates -- Mexico, Foreign exchange market -- Mexico, Manufacturing industries -- Mexico|
|Series Name:||Warwick economic research papers|
|Publisher:||University of Warwick, Department of Economics|
|Place of Publication:||Coventry|
|Official Date:||March 2008|
|Number of Pages:||20|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
Abel, A.B., 1983, Optimal Investment under Uncertainty, American Economic Review, 73, pp 228-33
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