The paper surveys theories of FDI and supporting evidence. A new theory flashes out a unique feature of FDI: hands on management style that enables investors to react in real time to changing economic environments. Equipped with superior intangible know how in screening firms, foreign direct...

Large capital inflows are understandably viewed as dangerous in emerging markets living with memories of recent currency crises: in Israel foreign capital provided crucial funding for investment in the country's showcase technology sector. Israel is now solidly established as a high-tech...