TY - BOOK ID - 136287784 TI - Exchange Rate Volatility and FDI Inflows : Evidence from Cross-Country Panel Data AU - Hanusch, Marek. AU - Algu, Yashvir. AU - Nguyen, Ha. PY - 2018 PB - Washington, D.C. : The World Bank, DB - UniCat KW - Capital Flows KW - Currencies and Exchange Rates KW - Exchange Rates KW - Finance and Financial Sector Development KW - Foreign Direct Investment KW - Macroeconomics and Economic Growth UR - https://www.unicat.be/uniCat?func=search&query=sysid:136287784 AB - Using a panel of 80 developing and developed countries for the period 1990-2015, this studyanalyses the relationship between exchange rate volatility and foreign direct investment (FDI)inflows. The results reveal a negative relationship between de facto exchange rate volatility andFDI. Reducing exchange rate volatility by 10 percent over one-year can boost FDI inflows-ceterisparibus-by an estimated 0.48 percentage points of GDP while the same reduction over the pastfive years can boost FDI inflows by 0.27 percentage points over the long-run. The results areapplied to the case of South Africa, which has been experiencing high volatility of the rand inrecent years. Reducing the rand's volatility to that of developing country peers, South Africa could boost FDI inflows by a potential of 0.25 percentage points of GDP. ER -