We develop a general equilibrium model with financial frictions in which internal capital (equity capital) and external capital (bank loans) have dierent rates of return. Financial development raises the rate of return on external capital but has a non-monotonic effect on the rate of return on...

We estimate a theory-based modified gravity model to analyze the effects of foreign direct investment (FDI) to China on FDI to other countries over the period 1990–2004. Our results suggest that on average, ceteris paribus, FDI flows to China have been complementary to FDI flows to other...

The decades preceding the recent financial crisis and global downturn were a period of unusually mild output volatility for many developed and developing market economies. We analyse data from 85 countries and report findings consistent with the hypothesis that foreign direct investment had a...

Combining the classical “push-pull factors” and the “Lucas paradox” theoretical approaches, and taking into account the relationship between components of capital flows -through Three Stage Least Square (3SLS) estimations-, this paper shows that physical infrastructure and financial...

Many studies have underlined the detrimental impact of local political risk on foreign direct investment inflows. In this paper, we argue that that relationship depends on the global volume of FDI. After providing a simple model and theoretical arguments suggesting that the relationship should...

Offshore use of the renminbi expanded rapidly in Hong Kong SAR as China sought to develop an international role for its currency while maintaining capital controls. This prompts two questions addressed in this paper: How far advanced is renminbi internationalization? And, what role does Chinese...

This paper uses new data and new econometric techniques to investigate the impact of international financial integration on economic growth and also to assess whether this relationship depends on the level of economic development, financial development, legal system development, government...

Reichen die auf dem G-20-Gipfel beschlossenen Maßnahmen aus, die Finanzmärkte zu regulieren und die Wahrscheinlichkeit zukünftiger Krisen zu senken? Für Rolf J. Langhammer, Institut für Weltwirtschaft, Kiel, dienten die Beschlüsse des G-20-Gipfels der Krisenüberwindung und dem Versuch,...

This paper examines the productivity effect of technology spillovers via vertical linkages through foreign direct investment (FDI) in India. An analysis of firm-level panel data from the Indian manufacturing sector from 2000–2001 to 2007–2008 employing the semi-parametric method of...

By making use of a recently released dataset that covers a large number of manufacturing firms over the period 2000–2005, this paper examines the impact of foreign direct investment (FDI) and FDI generated spillovers on total factor productivity (TFP) in eight regions of Vietnam. Unlike most...