In the presence of asymmetric information, the stage at which investment-financing decisions are made is crucial for the composition of international capital flows as well as for the efficiency of channeling savings into investment. This paper compares the implications of two extreme assumptions...

In Razin, Sadka and Yuen (1998, 1999a), we explored the policy implications of the home-bias in international portfolio investment as a result of asymmetric information problems in which domestic savers, being "close" to the domestic market, have an informational advantage over foreign portfolio...

Foreign direct investment (FDI) is observed to be a predominant form of capital flows to emerging economies, especially when they are liquidity-constrained internationally during a global financial crisis. The financial aspects of FDI are the focus of the paper. We analyze the problem of...