TY - JOUR AU - Gouidar, Abdessalem AU - Nouira, Ridha PY - 2014/08/26 Y2 - 2024/03/28 TI - The Impact of Misalignment on FDI in the Developing Countries JF - International Journal of Economics and Financial Issues JA - IJEFI VL - 4 IS - 4 SE - Articles DO - UR - https://www.econjournals.com/index.php/ijefi/article/view/857 SP - 784-800 AB - <p>This paper contributes to a current and intense debate among economists concerning the impact that real exchange rate misalignment can have on FDI. To identify the degree of misalignment, a model of Edwards in Panel will be estimated for a sample of 52 developing countries over the period 1980-2010. Once the misalignment values ​​are determined, they will be included in the FDI model. The results prove that the misalignment is a main determinant of the FDI in the developing countries. Indeed, the overvaluation has a negative and significant effect on the FDI while undervaluation does not have a significant effect on it. Finally, a persistent overvaluation in developing countries can slow down the flow of FDI to these countries, whereas the persistent undervaluation stimulates these flows.</p> <p><strong>Keywords</strong>:&nbsp; Foreign direct investment; Overvaluation; Undervaluation</p> <p><strong>JEL Classifications:</strong> C21; C23;<strong>&nbsp;</strong>F31; F33&nbsp;</p> ER -