EXCHANGE RATE VOLATILITY AND INWARD FDI: A PANEL DATA ANALYSIS OF BALKAN COUNTRIES
This study investigates the relationship between exchange rate volatility and foreign direct investment (FDI) inflows in Balkan countries, a region known for its political instability and significant economic and institutional challenges. Using secondary data from 2011 to 2021, this study employs a...
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| Format: | Article |
| Language: | English |
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Editura Universitatii Agora
2024-12-01
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| Series: | Agora International Journal of Economical Sciences |
| Online Access: | https://univagora.ro/jour/index.php/aijes/article/view/6952 |
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| author | Kevin Morina Nertil Mera |
| author_facet | Kevin Morina Nertil Mera |
| author_sort | Kevin Morina |
| collection | DOAJ |
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This study investigates the relationship between exchange rate volatility and foreign direct investment (FDI) inflows in Balkan countries, a region known for its political instability and significant economic and institutional challenges. Using secondary data from 2011 to 2021, this study employs a fixed-effects model with a dynamic specification to analyze the impact of exchange rate volatility on FDI, alongside other key determinants such as inflation, crude oil prices and corruption perception index. The results indicate that exchange rate volatility negatively impacts the FDI inflows, while crude oil prices are found to have a significant positive effect. The impact of inflation and corruption perception index is found insignificant in explaining FDI inflows, suggesting that these factors do not substantially influence investment decisions in the Balkan region. These findings contribute to the literature on FDI in the Balkans and provide valuable insights for policymakers and investors. The results suggest that reducing exchange rate volatility could improve the investment climate and enhance the region’s attractiveness for foreign investment.
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| format | Article |
| id | doaj-art-46ef2f11682345cfb9e8a5e24e2e36a9 |
| institution | Kabale University |
| issn | 2067-3310 2067-7669 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | Editura Universitatii Agora |
| record_format | Article |
| series | Agora International Journal of Economical Sciences |
| spelling | doaj-art-46ef2f11682345cfb9e8a5e24e2e36a92024-12-29T13:39:08ZengEditura Universitatii AgoraAgora International Journal of Economical Sciences2067-33102067-76692024-12-0118210.15837/aijes.v18i2.6952EXCHANGE RATE VOLATILITY AND INWARD FDI: A PANEL DATA ANALYSIS OF BALKAN COUNTRIESKevin MorinaNertil Mera This study investigates the relationship between exchange rate volatility and foreign direct investment (FDI) inflows in Balkan countries, a region known for its political instability and significant economic and institutional challenges. Using secondary data from 2011 to 2021, this study employs a fixed-effects model with a dynamic specification to analyze the impact of exchange rate volatility on FDI, alongside other key determinants such as inflation, crude oil prices and corruption perception index. The results indicate that exchange rate volatility negatively impacts the FDI inflows, while crude oil prices are found to have a significant positive effect. The impact of inflation and corruption perception index is found insignificant in explaining FDI inflows, suggesting that these factors do not substantially influence investment decisions in the Balkan region. These findings contribute to the literature on FDI in the Balkans and provide valuable insights for policymakers and investors. The results suggest that reducing exchange rate volatility could improve the investment climate and enhance the region’s attractiveness for foreign investment. https://univagora.ro/jour/index.php/aijes/article/view/6952 |
| spellingShingle | Kevin Morina Nertil Mera EXCHANGE RATE VOLATILITY AND INWARD FDI: A PANEL DATA ANALYSIS OF BALKAN COUNTRIES Agora International Journal of Economical Sciences |
| title | EXCHANGE RATE VOLATILITY AND INWARD FDI: A PANEL DATA ANALYSIS OF BALKAN COUNTRIES |
| title_full | EXCHANGE RATE VOLATILITY AND INWARD FDI: A PANEL DATA ANALYSIS OF BALKAN COUNTRIES |
| title_fullStr | EXCHANGE RATE VOLATILITY AND INWARD FDI: A PANEL DATA ANALYSIS OF BALKAN COUNTRIES |
| title_full_unstemmed | EXCHANGE RATE VOLATILITY AND INWARD FDI: A PANEL DATA ANALYSIS OF BALKAN COUNTRIES |
| title_short | EXCHANGE RATE VOLATILITY AND INWARD FDI: A PANEL DATA ANALYSIS OF BALKAN COUNTRIES |
| title_sort | exchange rate volatility and inward fdi a panel data analysis of balkan countries |
| url | https://univagora.ro/jour/index.php/aijes/article/view/6952 |
| work_keys_str_mv | AT kevinmorina exchangeratevolatilityandinwardfdiapaneldataanalysisofbalkancountries AT nertilmera exchangeratevolatilityandinwardfdiapaneldataanalysisofbalkancountries |