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@article{ART002244388},
author={Liu, Guo Dan and Jo,Gab Je},
title={Impact of the Renminbi’s Real Exchange Rate on Foreign Direct Investment: The case of China},
journal={Journal of Asia-Pacific Studies},
issn={1225-8539},
year={2017},
volume={24},
number={2},
pages={245-264},
doi={10.18107/japs.2017.24.2.008}

TY - JOUR
AU - Liu, Guo Dan
AU - Jo,Gab Je
TI - Impact of the Renminbi’s Real Exchange Rate on Foreign Direct Investment: The case of China
JO - Journal of Asia-Pacific Studies
PY - 2017
VL - 24
IS - 2
PB - Institute of Global Affairs
SP - 245
EP - 264
SN - 1225-8539
AB - This study investigates the impact of exchange rate on FDI(foreign direct investment) through ‘the impulse response function’, based on the VAR model. Th VAR model include monthly real growth rate of foreign direct investment, RMB(Renminbi)’s real effective exchange rate, industrial production index, labor cost and trade exports from January 2001 to December 2015. We found that the RMB appreciation has a positive impact on FDI after a certain period of time. Also, It is found that the labor cost has a negative impact on FDI. Further, the effect of the RMB appreciation on the FDI depends on industry. The financial and real estate industries are believed to have attracted FDI due to the appreciation of the RMB. On the other hand, for the manufacturing industry, it is found that the appreciation of the RMB has restrained FDI flows. China’s low labor cost advantage over the last decade no longer exists in the wake of rising wages every year. This further suppressed FDI inflows in manufacturing.
KW - Renminbi;Real Exchange Rate;Foreign Direct Investment;China;VAR model
DO - 10.18107/japs.2017.24.2.008
ER -

Liu, Guo Dan and Jo,Gab Je. (2017). Impact of the Renminbi’s Real Exchange Rate on Foreign Direct Investment: The case of China. Journal of Asia-Pacific Studies, 24(2), 245-264.

Liu, Guo Dan and Jo,Gab Je. 2017, "Impact of the Renminbi’s Real Exchange Rate on Foreign Direct Investment: The case of China", Journal of Asia-Pacific Studies, vol.24, no.2 pp.245-264. Available from: doi:10.18107/japs.2017.24.2.008

Liu, Guo Dan, Jo,Gab Je "Impact of the Renminbi’s Real Exchange Rate on Foreign Direct Investment: The case of China" Journal of Asia-Pacific Studies 24.2 pp.245-264 (2017) : 245.

Liu, Guo Dan, Jo,Gab Je. Impact of the Renminbi’s Real Exchange Rate on Foreign Direct Investment: The case of China. 2017; 24(2), 245-264. Available from: doi:10.18107/japs.2017.24.2.008

Liu, Guo Dan and Jo,Gab Je. "Impact of the Renminbi’s Real Exchange Rate on Foreign Direct Investment: The case of China" Journal of Asia-Pacific Studies 24, no.2 (2017) : 245-264.doi: 10.18107/japs.2017.24.2.008

Liu, Guo Dan; Jo,Gab Je. Impact of the Renminbi’s Real Exchange Rate on Foreign Direct Investment: The case of China. Journal of Asia-Pacific Studies, 24(2), 245-264. doi: 10.18107/japs.2017.24.2.008

Liu, Guo Dan; Jo,Gab Je. Impact of the Renminbi’s Real Exchange Rate on Foreign Direct Investment: The case of China. Journal of Asia-Pacific Studies. 2017; 24(2) 245-264. doi: 10.18107/japs.2017.24.2.008

Liu, Guo Dan, Jo,Gab Je. Impact of the Renminbi’s Real Exchange Rate on Foreign Direct Investment: The case of China. 2017; 24(2), 245-264. Available from: doi:10.18107/japs.2017.24.2.008

Liu, Guo Dan and Jo,Gab Je. "Impact of the Renminbi’s Real Exchange Rate on Foreign Direct Investment: The case of China" Journal of Asia-Pacific Studies 24, no.2 (2017) : 245-264.doi: 10.18107/japs.2017.24.2.008