We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
EXCHANGE RATE, EXCHANGE RATE VOLATILITY AND FOREIGN DIRECT INVESTMENT: Evidence from Africa Franc Zone Countries.
- Authors
Suliman, Adil; Ali, Hamid E.
- Abstract
There are different ways by which the exchange rate may be linked to foreign direct investment (FDI). In this paper, we explore the Granger causality between FDI and real exchange rate (EX real exchange rate volatility (VOL), and GDP growth for the CFA franc zone countries in sub Saharan Africa, from 1985 - 2003. For the panel data analysis FDI and EX have two-ways Granger causality. FDI is said to be Granger cause by EX if EX helps in prediction of FDI, or equivalently if the coefficient of Lagged EX are statistically significant in regression of FD1 on EX. For individual country analysis, contrary to the findings of previous studies, our findings show that the Granger causality test of FDI and real exchange rate and its volatility does not exist across all the CFA franc zone countries except four countries. However. the Granger causality of FDI and GDP growth does exist across all countries.
- Subjects
AFRICA; FOREIGN exchange rates; MARKET volatility; FOREIGN investments; FRENCH franc area; GROSS domestic product; GRANGER causality test; ECONOMIC development
- Publication
International Journal of Finance, 2012, Vol 24, Issue 3, p7406
- ISSN
1041-2743
- Publication type
Article