Revue d'études sur les institutions et le développement
Volume 6, Numéro 1, Pages 138-157
2020-11-29

Impact Of Foreign Exchange Rate On Foreign Direct Investment: Egypt Case

Authors : Fadl Nada . Ghoneim Hebatallah .

Abstract

The objective of this paper is to examine the relation between FDI and exchange rates. In order to understand this relation, each variable had to be first examined on its own. From the literature gathered, a research gap has been reached, which is to further examine the effect of exchange rate levels on FDI in developing countries; namely Egypt. The regression results showed that exchange rate has a significantly positive effect on FDI, meaning that as the domestic currency depreciates, FDI level rises. This result is reached along with the significant and positive effect on FDI of the following variables; openness, GDP per capita growth, urban population, and natural resource endowment. From these results, some policy implications and recommendations are provided.

Keywords

Exchange rates ; Foreign direct investment ; Egypt ; Electric Paradigm Model