We examine determinants of, and interactions between, capital inflows, financial development, and domestic investment … macroeconomic policy. Both private capital inflows and domestic credit exert a positive effect on investment; they also mediate most … of the investment impact of the global price of risk and domestic borrowing costs. Surprisingly, neither greater domestic …

’s “open door” policy that brought about a dramatic expansion in foreign trade and foreign direct investment …

Even modest investment rates may achieve satisfactory rates of growth in the reforming economies of Eastern Europe … investment is uncertainty about the reform process, which can potentially rule out all but the most profitable projects. This … form of loans and foreign direct investment …

direct investment is also substantial. We explain these features in terms of a conventional neoclassical growth model-with no …

We document that (i) although private investment growth in emerging markets has decelerated in recent years, it came … down from cyclical highs and remains close to pre-crisis trends; and (ii) investment-to-output ratios generally remain … close to or above historical averages. We show that investment is positively related to expect future profitability, cash …

inflows and domestic investment. However, this relationship has evolved over time. While growing financial integration with … domestic investment has weakened, reflecting changes in the composition of inflows, offsetting outflows, and increased foreign … direct investment, have tended to strengthen the relationship between foreign capital and domestic investment …