International transmission of exchange rate volatility: Evidence from FIEs’ investments in China

IF 2.9 3区经济学 Q2 BUSINESS, FINANCE

Journal of Multinational Financial Management Pub Date : 2023-06-01 DOI:10.1016/j.mulfin.2023.100797

Yanke Dai , Baoxin Li , Yangfei Xu

引用次数: 0

Abstract

This paper studies the cross-border transmission of exchange rate volatility through foreign-invested enterprises (FIEs)’ investments. We find that exchange rate volatility in FIEs’ home countries reduces the investments made by FIEs, which is exacerbated in industries with greater external finance dependence. We further confirm that the reduction in investment is due to a decrease in financial support from FIEs’ parent enterprises. By comparing FIEs whose parents are located in countries with different levels of financial development and in sectors with different levels of investment irreversibility, we test two potential channels of transmission, namely, the uncertainty channel and the financing channel. We also attempt to test the potential indirect impact on local firms through the production network.

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汇率波动的国际传导：外资企业在华投资的证据

本文研究了外商投资企业投资对汇率波动的跨境传导。我们发现外商投资企业所在国的汇率波动减少了外商投资企业的投资，在对外部融资依赖程度较高的行业，这种情况会加剧。我们进一步确认，投资减少是由于外资企业母公司的资金支持减少。通过比较母公司位于金融发展水平不同的国家和投资不可逆性水平不同的行业的外商投资企业，我们检验了两种潜在的传播渠道，即不确定性渠道和融资渠道。我们还试图测试通过生产网络对当地企业的潜在间接影响。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Multinational Financial Management BUSINESS, FINANCE-

CiteScore

7.30

自引率

4.80%

发文量

审稿时长

30 days

期刊介绍： International trade, financing and investments have grown at an extremely rapid pace in recent years, and the operations of corporations have become increasingly multinationalized. Corporate executives buying and selling goods and services, and making financing and investment decisions across national boundaries, have developed policies and procedures for managing cash flows denominated in foreign currencies. These policies and procedures, and the related managerial actions of executives, change as new relevant information becomes available. The purpose of the Journal of Multinational Financial Management is to publish rigorous, original articles dealing with the management of the multinational enterprise. Theoretical, conceptual, and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • Foreign exchange risk management • International capital budgeting • Forecasting exchange rates • Foreign direct investment • Hedging strategies • Cost of capital • Managing transaction exposure • Political risk assessment • International working capital management • International financial planning • International tax management • International diversification • Transfer pricing strategies • International liability management • International mergers.