It has long been observed that a country tends to receive increased foreign direct investment (FDI) inflow when its currency depreciates. We provide an explanation of this correlation and examine the implied welfare effects of short-run FDI flow. Firms' cross-border production location decisions...

This paper examines whether foreign direct investment between countries fosters stock market integration. Empirical tests demonstrate that both the flow and the level of bilateral foreign direct investment between countries explain country-pair stock market integration. More specifically, higher...