UnissResearch

Logo Universitàegli studi di Sassari
titoli, abstracts, parole chiave >>>
Will the euro be beneficial on firm’s investment behaviour? An empirical investigation on a panel of Italian firms

Atella, Vincenzo and Atzeni, Gianfranco Enrico and Belvisi, Pier Luigi (2002) Will the euro be beneficial on firm’s investment behaviour? An empirical investigation on a panel of Italian firms. Roma, CEIS. p. 28 (Quaderni Ceis, 2002, 180). Working Paper.

Full text not available from this repository.

Alternative URLs:

Abstract

The literature on the relationship between exchange rate and investment mainly focus on the devaluation argument, which evidences that a devaluation may affect positively investment spending. The goal of this paper is to extend the analysis to how exchange rate variability can influence firm’s innovation process. Employing a large panel of Italian firms we estimate the impact of exchange rate on investment. Combining an ECM model specification with a model of signal extraction we find that exchange rate volatility reduces investment, with a decreasing sensitivity the greater is firm market power. A stable exchange rate is then an incentive to investment as it allows more reliable estimation of its marginal productivity. To this extent, an economic system may benefit from a stable exchange rate in terms of investment and profit, provided it is able to strengthen its firm market power.

Item Type:Working Paper
ID Code:2338
Status:Published
Uncontrolled Keywords:Exchange rate, firm heterogeneity, investment, uncertainty
Subjects:Area 13 - Scienze economiche e statistiche > SECS-P/01 Economia politica
Divisions:002 Altri enti e centri di ricerca del Nord Sardegna > CRENoS-Centro Ricerche Economiche Nord Sud, Università di Cagliari e Università di Sassari
001 Università di Sassari > 01 Dipartimenti > Economia, impresa, regolamentazione
Publisher:CEIS
Deposited On:18 Aug 2009 10:07

I documenti depositati in UnissResearch sono protetti dalle leggi che regolano il diritto d'autore

Repository Staff Only: item control page