ABSTRACT

This chapter presents the second set of estimation results introducing variables measuring the "openness" of each sector into the regressions. This provides an opportunity to analyze the export and import exposure of the individual sectors in conjunction with real investment in the manufacturing sectors. As mentioned in Section 3.4, regressions that do not include the export and import share of the sectors may underestimate the effects of real exchange rates and real exchange rate volatility on investment expenditures.