This paper examines theoretically and empirically the relationship between Foreign Direct Investment and the real exchange rate. It is found that in large countries with freely floating currencies, such as the USA, the UK and Japan, causality runs from the real exchange rate to FDI. These...

This paper examines the importance of openness for attracting Foreign Direct Investment (FDI) inflows, using a sample of 36 developing economies for the period 1990-2008. It provides a direct test of causality between FDI, openness and other key variables in developing regions of the world:...