Japanese FDI into U.S. service industries: Exchange rate changes and services tradability

Tomlin, Kasaundra

doi:10.1016/j.japwor.2007.04.002

Cited by 14 publications

(11 citation statements)

References 21 publications

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“…Contrary to most studies that say that currency depreciation leads to increased FDI inflows, the study by Tomlin (2008) showed that the appreciation of the US dollar led to an increased flow of Japanese FDI into the service industry of the US. Yet, a study carried out by Baek and Okawa (2001) showed that a depreciation of the Asian currencies against the US dollar attracted quite a substantial amount of FDI into the export-oriented electrical machinery sector as compared to the manufacturing sector.…”

Section: Review Of Related Literaturecontrasting

confidence: 62%

“…According to Tomlin (2008), high exchange rate volatility insignificantly dampened Japanese FDI inflows into tradable and non tradable producer services in the United States (US) during the period between 1974 and 1994. Contrary to most studies that say that currency depreciation leads to increased FDI inflows, the study by Tomlin (2008) showed that the appreciation of the US dollar led to an increased flow of Japanese FDI into the service industry of the US.…”

Section: Review Of Related Literaturementioning

confidence: 99%

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FDI location and exchange rates. is there really a relationship between the two?

Tsaurai¹

2015

COC

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The exchange rate led foreign direct investment (FDI), FDI led exchange rates and feedback effect hypotheses summarise the literature around the nature of the relationship between FDI and exchange rates. So many authors on this subject over a long period have been found to generally side with of the above-mentioned hypothesis or another without a consensus. Despite this lack of consensus with regard to the exact nature of the causal relation between these two variables, what is coming out clearly from the literature is that there indeed exist a relationship between FDI and exchange rates. The lack of consensus has prompted this current study that used the ARDL (Autoregressive distributed lag)-bounds testing approach. The study revealed the existence of causality from (1) the rand value to FDI in the long run and (2) FDI to the rand value only in the short run in South Africa. The author recommends that policies which strengthen the value of the rand should be put in place in order to attract FDI in the long run. The flow of FDI into South Africa will in turn not only stabilises the value of the rand.

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Section: Review Of Related Literaturecontrasting

confidence: 62%

Section: Review Of Related Literaturementioning

confidence: 99%

FDI location and exchange rates. is there really a relationship between the two?

Tsaurai¹

2015

COC

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“…Other authors propose a broader analysis of the location determinants of service sectors or functions: this is the case, for example, with Tomlin (2008) who examines fourteen service sectors; Defever (2006Defever ( , 2012 takes into account five production and service functions in the same time (headquarters, R & D, production, logistics, and sales and marketing), whereas Py and Hatem (2009) develop an analysis encompassing seven functions (production, headquarters, R & D, logistics, sales, delivery of services, and call centers).…”

Section: Literature Reviewmentioning

confidence: 99%

“…infra). Nevertheless, it has mainly focused on the study of service functions in the manufacturing sector (Holmes 2005;Defever and Mucchielli 2005;Defever 2006;Henderson and Ono 2008;Defever 2012), with only few papers addressing the specific case of service sectors (Kolstad and Villanger 2008;Tomlin 2008;Nefussi and Schwellnus 2010;Castellani, Meliciani, and Mirra 2014). The research examining jointly service functions and service sectors is scarce.…”

Section: Introductionmentioning

confidence: 99%

Do Foreign Investors’ Location Determinants in Service Functions Differ According to Sectors? An Empirical Analysis of EU for 1997 to 2011

Duboz

Kroichvili

Gallo

2016

International Regional Science Review

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European Union (EU) is very attractive for foreign direct investment (FDI) in services and policy makers should know the reasons explaining investment location choices of foreign firms in order to attract them. This article explores FDI location determinants in service functions in the EU-28. Studies dealing with such an issue stay generally focused on the location of service functions in the manufacturing sector. Our assumption is that the location determinants of service functions may differ according to sectors. So, we propose to study whether the location pattern of some service functions is sector independent, whereas it is sector dependent for other service functions. Using a database developed by Ernst and Young, we estimate mixed logit models on foreign firms' location choices. Our contribution is to consider simultaneously three sectors and eight service functions for 271 European regions, during the period 1997 to 2011. Our fundamental findings are that service functions location choices are different according to sectors and that location Downloaded from determinants vary according to the service function considered. The only variables significant for all service functions are agglomeration variables. However, our contribution is to distinguish between different types of agglomeration (regional, sectorial, functional, and group agglomeration) and to show that some agglomeration variables act differently according to service functions.

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“…An explanation could be that greenfield investments do not involve any acquisition of firmspecific assets and may be thus less sensitive to exchange rate levels (Pain and Van Welsum 2003). Looking at investments in the service sector, Tomlin (2008) finds that an appreciation of the dollar leads to more capital inflows into the US service industry.…”

Section: The Literature On Fdi and Exchange Ratesmentioning

confidence: 99%

Foreign Direct Investment and Exchange Rate Regimes

Busse

Hefeker

Nelgen³

2010

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Terms of use: Documents in AbstractThe paper uses a comprehensive data set with bilateral direct investment flows and establishes the influence of the de-facto exchange rate regime for FDI flows. We find a strong and significant effect from fixed rates on bilateral FDI flows in developed economies, but no significant effect for developing countries. There is thus no general and uniform impact of stable exchange rates on FDI. We provide several possible explanations for this difference.

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Japanese FDI into U.S. service industries: Exchange rate changes and services tradability

Cited by 14 publications

References 21 publications

FDI location and exchange rates. is there really a relationship between the two?

FDI location and exchange rates. is there really a relationship between the two?

Do Foreign Investors’ Location Determinants in Service Functions Differ According to Sectors? An Empirical Analysis of EU for 1997 to 2011

Foreign Direct Investment and Exchange Rate Regimes

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