Effect of the RMB exchange rate change on FDI inflow divided by industry

摘要

The effect of the exchange rate change on foreign direct investment (FDI) is a matter of concern, however, the views of scholars in various countries are different. In this paper, we divide FDI by industry, using the monthly data from 2006.1 to 2009.12 to analyze the impact of the real exchange rate change on FDI. The result shows that: there is a significant positive correlation between the RMB exchange rate and service industry FDI, and a negative correlation between the RMB exchange rate and manufacturing industry FDI. But due to the larger degree of influence on the former, thus the exchange rate movements and the total FDI in China are positively correlated.