Investment in the Brazilian manufacturing industry and the real exchange rate: An investigation using sectoral-level panel data
Abstract
This paper studies the impact of the real exchange rate on investment in the Brazilian industry. We develop a model that considers the effect of changes in the real exchange rate on the industrial investment. The determinants of the real exchange rate can affect differently the demand for the products and the industrial sectors’ competitiveness. The composition of these effects varies among industrial sectors, with different repercussions on investment. A panel data analysis is applied to estimate the model for the different Brazilian industrial sectors from 1996 to 2010 and the main result is that investment responsiveness to exchange rate varies among sectors.
Author(s)
Carolina Troncoso Baltar, Celio Hiratuka, Gilberto Tadeu Lima
Publication Status
Published in Berlin Working Papers on Money, Finance, Trade and Development, September 2014