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Foreign Exchange Rates and FDI Behavior of Multinational Enterprises: Comparative Analysis Before and After the 1997 Korean Financial Crisis

Byung S. Min (Griffith University)

Journal of Asia Business Studies

ISSN: 1558-7894

Article publication date: 21 May 2010

51

Abstract

This paper investigates whether the investment strategies of multinational enterprises (MNEs) have changed as a result of the 1997 financial crisis in Korea. Estimation results using balanced panel data indicate that the investment decisions of global MNEs seem to have changed following the crisis. The crisis seems to have served as a “cold shower” for MNEs making investment decisions, as they have taken exchange rate “volatility” into account to a greater extent following the crisis. In contrast, there is no robust evidence that the investment decisions of foreign investors are closely correlated with the level of exchange rate, either before or after the crisis.

Keywords

Citation

Min, B.S. (2010), "Foreign Exchange Rates and FDI Behavior of Multinational Enterprises: Comparative Analysis Before and After the 1997 Korean Financial Crisis", Journal of Asia Business Studies, Vol. 4 No. 2, pp. 100-108. https://doi.org/10.1108/jabs.2010.4.2.100

Publisher

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Emerald Group Publishing Limited

Copyright © 2010, Emerald Group Publishing Limited

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