Current account deficit sustainability: The case of Greece

Apergis, Nicholas; Katrakilidis, K.; Tabakis, Nikolaos M.

doi:10.1080/13504850050059087

Cited by 66 publications

(40 citation statements)

References 20 publications

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“…In particular, the level of exchange rate is reported to have a negative impact on FDI, implying that increases of the exchange rate of Euro per host countries currency cause decreases on the Greek outward FDI. This result is in line with what suggested by several studies (Apergis et al, 2000;De Menil, 1997;Campa, 1993), arguing that potential depreciations of the host countries currency may finally lead to lower outward FDI to the depreciated economies. A negative and statistical relationship is also observed between the level of minimum nominal wage, the marginal labor productivity and the outsource of Greek outward FDI, under the assumption that there are no differences among the 16 economies (second column).…”

Section: Theoretical Backgroundsupporting

confidence: 92%

“…Moreover, in the long run, depreciations in the host country's currency may cause inflation and, finally, reduce its international competitiveness. Negative effects could be also be attributed for the MNCs to the long-run depreciation in the host economy may reduce the value of the subsidiaries located in the host country and may eventually reduce the total value of the parent MNC (Apergis et al (2000) for a detailed explanation). Apergis et al (2000) andDe Menil (1997) suggest that the negative effects dominate and, thus, exchange rate depreciations in the host country lead to lower inward FDI.…”

Section: The Literature On Fdi and Exchange Ratesmentioning

confidence: 99%

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The Explanatory Variables of Outward Foreign Direct Investment: Panel Evidence

Apergis¹

2012

American Journal of Economics and Business Administration

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Along with the traditional macroeconomic determinants of FDI, additional explanatory variables, such as the exchange rates, should be encountered in undertaking physical investment decisions, as these variables affect several comparative costs and the cost of lending. The goal of this study is to examine for the first time panel data evidence of Greek outward FDI flows directed to 16 EU and non-EU countries over the period 1997-2008, focusing on the relative importance of emerging variables on the determination of the direction of FDI. The results clearly show that-under different specifications-increases in the level of exchange, affect FDI flows directed from Greece to the host economies. Moreover, significant determinants for the streaming of the Greek FDI are the minimum wage rate and the labour productivity in the host economies as well as the price of the Greek physical capital.

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Section: Theoretical Backgroundsupporting

confidence: 92%

Section: The Literature On Fdi and Exchange Ratesmentioning

confidence: 99%

The Explanatory Variables of Outward Foreign Direct Investment: Panel Evidence

Apergis¹

2012

American Journal of Economics and Business Administration

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“…Using US data for 1967-1989Husted (1992 finds that the US imports and exports are cointegrated, though there is an increase in the equilibrium deficit since 1983. Finally, Apergis et al (2000) and Tang (2006), respectively, find that the Greek and Japanese current account are sustainable using unit root and cointegration tests that allow for structural breaks.…”

Section: Literaturementioning

confidence: 99%

The sustainability of India's current account

2011

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This study conducts an investigation into the sustainability of the Indian current account using data for 1950 onwards. A necessary condition for current account sustainability is that exports and imports are cointegrated. After testing for unit roots that allow for a structural break, we employ parametric tests for cointegration: based on Johansen (1995) and Saikkonen and Lutkepohl (2000a, b, c) as well as the nonparametric procedure proposed by Breitung (2002) and Breitung and Taylor (2003) that does not assume linearity. By employing these procedures recursively, two distinct regimes are identified characterized by whether or not imports and exports are cointegrated. The regime of noncointegration runs until the late 1990s and the second regime of cointegration is present after that. This latter regime coincides with the liberalization of the Indian economy.

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“…It refers to whether an economy is able to meet its intertemporal budget constraint in the long run without a drastic change in private-sector behavior or policy changes, such as a sharp currency depreciation or a reduction in government expenditures. One avenue to discuss this issue is to employ a linear unit root test, cointegration test, panel unit root and panel cointegration with a consideration being given to a structural break (e.g., Apergis, Katrakilidis, & Tabakis, 2000;Arize, 2002;Baharumshah, Lau, & Fountas, 2003;Bergin & Sheffrin, 2000;Holmes, 2006aHolmes, ,2006bHolmes, Otero, & Panagiotidis, 2010;Ismail & Baharumshah, 2008;Lau & Baharumshah, 2005;Lau, Baharumshah, & Haw, 2006;Liu & Tanner, 2001;Nag & Mukherjee, 2012). Basically, distinct results based on previous research are due to differences in methodology, approaches and samples and are subject to diverse interpretations, thus making it difficult to reach a corroborative position on the stationarity property of the current account.…”

Section: Introductionmentioning

confidence: 99%