Even though financial markets today show a high degree of integration, the world capital market is still far from the textbook story of high capital mobility. The failure to have a tax scheme in which the rate of returns across countries are equated can result in inefficient capital flows across...

Foreign direct investment (FDI) is observed to be a predominant form of capital flows to low- and middle-income countries with insufficiently developed capital markets. This paper analyses the problem of channelling domestic savings into productive investment, in the presence of asymmetric...

This paper brings the aid effectiveness debate to the sub-national level. We hypothesize the non-robust results regarding the effects of aid on development in the previous literature to arise due to the effects of aid being insufficiently large to measurably affect aggregate outcomes. Using...

We investigate the effects of short-term political motivations on the effectiveness of foreign aid. Donor countries’ political motives might reduce the effectiveness of conditionality, channel aid to inferior projects, reduce the aid bureaucracy’s effort, and change the power structure in...

Why should multilateral lending exist in a world where private capital markets are well developed and governments have their own bilateral aid programmes? If lending by the World Bank, IMF, and regional development banks has an independent rationale, it must rest on advantages generated by the...

Previous empirical work on the link between domestic and foreign investment provides mixed results which partly depend on the level of aggregation of the data. We argue that the aggregated home country implications of foreign direct investment (FDI) cannot be gauged using firm-level data....

This paper analyzes the effects of a potential spillover on technology transfer of a multinational enterprise and on the host country policy. In particular, we examine how both parties’ incentives can be controlled through the ownership structure in an international joint venture. In contrast...

This Paper empirically investigates two important determinants of international activity through wholly owned operations, joint-ventures and licensing, namely country risk and IPRs protection. Using a comprehensive database on investments in chemical plants during the period 1981-96, we show...

Using a unique data set from the Czech Republic for 1994-2003, this study examines the relationship between a firm’s liquidity constraints and its supply linkages with multinational corporations (MNCs). The empirical analysis indicates that Czech firms supplying MNCs are less credit...