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Previous studies that assessed the effects of exchange rate changes on the trade balance of South Africa assumed that the effects are symmetric. In this paper we violate that assumption and assess the asymmetric effects of the real rand‐dollar rate on the trade balance of 25 2‐digit industries that trade between South Africa and the U.S. We find short‐run asymmetric effects in a total of 19 industries but short‐run cumulative or impact asymmetric effects only on five industries. Short‐run asymmetric effects lasted into long‐run asymmetric effects on 14 industries. Further analysis revealed industries that will benefit from rand depreciation and those that will be hurt from rand appreciation. [ABSTRACT FROM AUTHOR]

Exchange rate changes are said to affect the level of domestic direct investment in either direction. In this paper we consider the experience of each of the 18 countries in Africa. When a linear model is used, we find that the real effective exchange rate has significant short-run effects on domestic investment in three countries and long-run effects in five countries. However, when a nonlinear model was used, the number of countries rose to 13 and seven respectively. Furthermore, in almost all countries, the short-run and long-run effects were asymmetric. [ABSTRACT FROM AUTHOR]

It is now a common practice to establish stationarity of the real exchange rate as a sign of purchasing power parity (PPP) hypothesis. In this article, we consider the real effective exchange rates of 29 African countries. When we apply conventional linear unit root tests, we find support for the PPP in eight countries. However, when we shift to the newly introduced non-linear quantile unit root test, support for the PPP increases to 15 countries. [ABSTRACT FROM PUBLISHER]

This paper draws attention to the implications of multinational enterprises (MNEs) investment in the nontraded sector of a developing host country when their investment is characterized by the transmission of superior technology, but also draws on the local capital market to secure factors of production. In a simple general equilibrium model, we show that once the MNEs control the nontraded sector, their activities generate disturbing results for the host country's economy. In particular, the host country may experience reduced total employment and real national income as a result of their investment. The cause for such unsettling outcomes is directly related to the MNEs utilization of their sector-specific stock of knowledge-based assets in the production of nontraded goods. [ABSTRACT FROM AUTHOR]