The boom of inward foreign direct investment (FDI) in East Asia since the mid-1980s and the recent Asian financial crisis raise the critical question of how FDI affects host economies. While there is considerable evidence on the link between FDI and economic growth, the causality between the two...

From the 32nd in _978 to the 3rd largest exporting country in the world in 2004, China’s export boom was accompanied by substantial inflows of foreign direct investment (FDI) in the same period. exports by foreign-invested enterprises in 2004 were $339 billion, comprising 57% of China’s...

Building up industrial competitiveness (IC) is a must for developing countries to industrialize their economies. How does foreign direct investment (FDI) affect IC? This study attempts to offer an answer to the question by using recent Chinese panel dataset. The significance of the topic,...

A small open economy model emphasizing the endogenous interestrate arbitrage was employed to examine whether arbitrage activities would dampen or augment exchange rate volatility against random disturbances. Based on numerical simulation, increased risk aversion of arbitragers was observed to...

This paper examines the relationship between exchange rate pass-through and exchange rate volatility. Numerical simulation suggests that increased degree of pass-through may be stabilizing or destabilizing the exchange rate, mainly depending on the source of random disturbances. The result is...

This paper assesses the validity of the ECB ‘benign neglect’ approach towards foreign exchange markets. I extend the analysis performed in Tronzano (2008) on the U$/Euro rate, applying a wide range of conditional volatility models to Yen/Euro data from 1999 to 2007. An overall evaluation of...

This research re-examines the desirability of central bank interventions in foreign exchange to reduce spot exchange rate volatility. A small open-economy macroeconomic model is developed to incorporate both macroeconomic fundamentals and micro-structural features of foreign exchange markets....

examines the volatility of the U$/Euro exchange rate during the period 1999-2005. According to our estimates, the degree of volatility persistence, although statistically significant, is rather low; moreover, there is no evidence of an asymmetric response of predictable volatility to past...

Ever since the early 1980s, major industrial countries have been suffering from severe multi-lateral trade imbalances, accompanied by tremendously volatile exchange rates. This paper examines the relationship between trade balance and exchange rate volatility. A stochastic macroeconomic model...

Eastern European Countries have attracted large FDI in the last decade, so, accordingly to the theoretical literature, they should receive significant gains from inward foreign direct investment in terms of economic growth. However, often it is neglected the fact that the benefits of FDI vary...