Download or read book FDI Spillovers Financial Markets and Economic Development written by Laura Alfaro and published by International Monetary Fund. This book was released on 2003-09-01 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the role financial markets play in the relationship between foreign direct investment (FDI) and economic development. We model an economy with a continuum of agents indexed by their level of ability. Agents can either work for the foreign company or undertake entrepreneurial activities, which are subject to a fixed cost. Better financial markets allow agents to take advantage of knowledge spillovers from FDI, magnifying the output effects of FDI. Empirically, we show that well-developed financial markets allow significant gains from FDI, while FDI alone plays an ambiguous role in contributing to development.
Download or read book FDI Spillovers Financial Markets and Economic Development written by and published by . This book was released on 2003 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book FDI Spillovers and Channels of Transmission in the EU written by Marialena Petrakou and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Financial sector FDI and Host Countries written by Linda S. Goldberg and published by . This book was released on 2004 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Reviews the main findings and policy themes of FDI research, with a primary focus on the host country implications of FDI for emerging market economies." - abstract.
Download or read book Spillovers from China written by MissNkunde Mwase and published by International Monetary Fund. This book was released on 2016-09-27 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: Although China’s much-needed transition to a new growth path is proceeding broadly as expected, the transition is still fraught with uncertainty, including regarding the Chinese authorities’ ability to achieve a smooth rebalancing of growth and the extent of the attendant slowdown in activity. Thus, in the short run, the transition process is likely to entail significant spillovers through trade and commodities, and possibly financial channels. This note sheds some light on the size and nature of financial spillovers from China by looking at the impact of developments in China on global financial markets, with a particular emphasis on differentiation across asset classes and markets. The note shows that economic and financial developments in China have a significant impact on global financial markets, but these effects reflect primarily the central role the country plays in goods trade and commodity markets, rather than China’s financial integration in global markets and the direct financial linkages it has with other countries.
Download or read book Foreign Direct Investment Finance and Economic Development written by Laura Alfaro and published by . This book was released on 2017 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: Research has sought to understand how foreign direct investment affects host economies. This paper reviews the empirical literature, specifically addressing the question: How does FDI affect economic development of host countries and what is the role of local financial markets in mediating the potential benefits? We first define FDI and discuss general theories on types and drivers of FDI. This review takes a host-country perspective rather than a firm perspective and thus only highlights the key insights from the rich firm-level literature on MNCs. We then focus on how financial conditions in host countries affect the extent of FDI-related capital inflows, shape the operations of foreign firms, and mediate the extent of productivity spillovers from FDI to local firms. The survey focuses mainly on work related to developing countries.
Download or read book How Does Foreign Direct Investment Promote Economic Growth written by Laura Alfaro and published by . This book was released on 2006 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: The empirical literature finds mixed evidence on the existence of positive productivity externalities in the host country generated by foreign multinational companies. We propose a mechanism that emphasizes the role of local financial markets in enabling foreign direct investment (FDI) to promote growth through backward linkages, shedding light on this empirical ambiguity. In a small open economy, final goods production is carried out by foreign and domestic firms, which compete for skilled labor, unskilled labor, and intermediate products. To operate a firm in the intermediate goods sector, entrepreneurs must develop a new variety of intermediate good, a task that requires upfront capital investments. The more developed the local financial markets, the easier it is for credit constrained entrepreneurs to start their own firms. The increase in the number of varieties of intermediate goods leads to positive spillovers to the final goods sector. As a result financial markets allow the backward linkages between foreign and domestic firms to turn into FDI spillovers.
Download or read book Foreign Direct Investment and Economic Growth written by Muhammad Arshad Khan and published by . This book was released on 2007 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Effect of FDI Through Local Financial Market on the Economic Growth written by and published by . This book was released on 2006 with total page 180 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines how financial development will facilitate FDI in order to promote economic growth. This is, the better-developed financial markets economies are able to benefit more from FDI to accelerate economic growth. This study applies regression analysis to quantitatively measure how the response of growth to FDI varies with the level of development of the financial markets over 1980-2004 periods. This paper uses OECD countries and NON-OECD countries and NON-OECD countries to represent the well and poor functioning financial market, respectively. From the regression results, we can conclude that the different structure of economic development and financial development leads to different ways in order to promote the economic growth. For the OECD countries, which financial markets are well-functioning, comparing with the NON-OECD countries, the financial market development in both banking sector and capital market can stimulate economic growth. Moreover, higher value of market capitalization (CAP) accelerates economic growth by attracting FDI inflows. For the NON-OECD countries, the financial market development and the interaction between financial market and FDI do not have any effect on economic growth. However, one-period lagged FDI plays a major role for accelerating economic growth. Therefore, in order to accelerate the economic growth, the policy maker should investigate whether a country is an OECD country or a NON-OECD country, and apply the appropriate policy. That is, if the country is an OEDC country, the policy maker should pursue the financial market development policy in order to accelerate the economic growth. Conversely, if the country is a NON-OECD country, the policy maker should pursue attracting FDI policy in order to accelerate the economic growth.
Download or read book How Does Foreign Direct Investment Promote Economic Growth Exploring the Effects of Financial Markets on Linkages written by Laura Alfaro and published by . This book was released on 2010 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: The empirical literature finds mixed evidence on the existence of positive productivity externalities in the host country generated by foreign multinational companies. We propose a mechanism that emphasizes the role of local financial markets in enabling foreign direct investment (FDI) to promote growth through backward linkages, shedding light on this empirical ambiguity. In a small open economy, final goods production is carried out by foreign and domestic firms, which compete for skilled labor, unskilled labor, and intermediate products. To operate a firm in the intermediate goods sector, entrepreneurs must develop a new variety of intermediate good, a task that requires upfront capital investments. The more developed the local financial markets, the easier it is for credit constrained entrepreneurs to start their own firms. The increase in the number of varieties of intermediate goods leads to positive spillovers to the final goods sector. As a result financial markets allow the backward linkages between foreign and domestic firms to turn into FDI spillovers. Our calibration exercises indicate that a) holding the extent of foreign presence constant, financially well-developed economies experience growth rates that are almost twice those of economies with poor financial markets, b) increases in the share of FDI or the relative productivity of the foreign firm leads to higher additional growth in financially developed economies compared to those observed in financially under-developed ones, and c) other local conditions such as market structure and human capital are also important to generate a positive effect of FDI on economic growth.
Download or read book FDI and Economic Growth written by Laura Alfaro and published by . This book was released on 2001 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we examine the various links among foreign direct investment (FDI), financial markets, and economic growth. We explore whether countries with better financial systems can exploit FDI more efficiently. Empirical analysis, using cross-country data between 1975-1995, shows that FDI alone plays an ambiguous role in contributing to economic growth. However, countries with well-developed financial markets gain significantly from FDI. The results are robust to different measures of financial market development, the inclusion of other determinants of economic growth, and consideration of endogeneity.
Download or read book FDI and Financial Market Development in Africa written by Isaac K. Otchere and published by . This book was released on 2015 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: The literature on the relationship between foreign direct investment (FDI), financial market development (FMD) and economic growth focuses mainly on two aspects: the relationship between FDI and economic growth and the role played by FMD in that linkage. The literature is almost silent on the relationship and the direction of causality between FDI and FMD. Although it has been established that FDI contributes more to growth in countries with more developed financial market, it is not clear how FDI and FMD interact with each other. The aim of this paper is to fill this gap in the African context. Particularly, in Africa, where stock markets experience low liquidity and less transparency, FDI can be an impetus for financial market reforms and serve as a mechanism to improve the transparency and the depth of the financial markets. Also, well-functioning financial markets can help channel foreign investments more efficiently into productive sectors, and therefore create more value for investors, hence make the countries more attractive to FDI. In short, both FDI and FMD will impact each other simultaneously, which is confirmed by our findings. We document a bi-directional causality between FDI and FMD. Furthermore, the multivariate regression results of the system of simultaneous equations also confirm the positive relationship between FDI and FMD in Africa. We also find that FDI contributes to economic growth in Africa after controlling for endogeneity between FDI, FMD and economic growth.
Download or read book Foreign Direct Investment Spillovers Financial Markets and Economic Developmen written by Laura Alfaro and published by . This book was released on 2003 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Causality Between FDI and Financial Market Development written by Issouf Soumaré and published by . This book was released on 2015 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the causal relationship between foreign direct investment (FDI) and financial market development (FMD) using panel data from emerging markets. Most studies of the relationship between FDI and FMD have focused on the role of FMD in the link between FDI and economic growth, with no deep understanding of direct causality between FDI and FMD, especially in emerging markets, where financial markets are in the development stage. We document bidirectional causality between FDI and stock market development indicators. For banking sector development indicators, the relationship is ambiguous and inconclusive. Care is therefore needed when analysing the relationship between FMD and FDI, as results may depend on whether the FMD variables used to evaluate causality are stock market or banking sector development indicators.
Download or read book OECD Energy Investment Policy Review of Ukraine written by OECD and published by OECD Publishing. This book was released on 2021-12-15 with total page 187 pages. Available in PDF, EPUB and Kindle. Book excerpt: This Review assesses Ukraine’s investment climate vis-à-vis the country’s energy sector reforms and discusses challenges and opportunities in this context. Capitalising on the OECD Policy Framework for Investment and other relevant instruments and guidance, the Review takes a broad approach to investment climate challenges facing Ukraine’s energy sector.
Download or read book Making Foreign Direct Investment Work for Sub Saharan Africa written by Thomas Farole and published by World Bank Publications. This book was released on 2014-01-13 with total page 302 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book presents the results of a groundbreaking study on ‘spillovers’ of knowledge and technology from global value-chain oriented foreign direct investment (FDI) in Sub-Saharan Africa, and discusses implications for policymakers hoping to harness the power of FDI for economic development.
Download or read book Real Effects of Capital Inflows in Emerging Markets written by Ms.Deniz O Igan and published by International Monetary Fund. This book was released on 2016-12-06 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the association between capital inflows and industry growth in a sample of 22 emerging market economies from 1998 to 2010. We expect more external finance dependent industries in countries that host more capital inflows to grow disproportionately faster. This is indeed the case in the pre-crisis period of 1998–2007, and is driven by debt, rather than equity, inflows. We also observe a reduction in output volatility but this association is more pronounced for equity, rather than debt, inflows. These relationships, however, break down during the crisis, hinting at the importance of an undisrupted global financial system for emerging markets to harness the growth benefits of capital inflows. In line with this observation, we also document that the inflows-growth nexus is stronger in countries with well-functioning banks.
