Exchange rate misalignment and capital inflows: an endogenous threshold analysis for Malaysia

Mohd Sidek , Noor Zahirah and Yusoff, Mohammed and Munir, Qaiser (2009) Exchange rate misalignment and capital inflows: an endogenous threshold analysis for Malaysia. In: International Conference on Business and Information, 6-8 July 2009, Kuala Lumpur . (Unpublished)

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Abstract

This study presents an attempt to investigate the impact of exchange rate misalignment on capital inflows in Malaysia. Specifically, a precise threshold value is estimated to examine when exchange rate misalignment suppresses capital inflows. To pursue these objectives, this study relies on the endogenous threshold analysis as of Hansen (1996, 2000). Results suggest that misalignment in terms of currency overvaluation, has a negative and significant effect when overvaluation is more than 15 percent. This estimate is consistent and robust despite the changes in the choice of explanatory variables. Keywords: Exchange rate misalignment, Capital inflows competitiveness, Threshold effect.

Item Type:	Conference or Workshop Item (Full Paper)
Additional Information:	4178/26005
Subjects:	H Social Sciences > HG Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User:	Professor Mohammed Yusoff
Date Deposited:	12 Jul 2013 09:48
Last Modified:	19 Jul 2013 09:28
URI:	http://irep.iium.edu.my/id/eprint/26005

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