Suchergebnisse

The object of this volume is to evaluate the pattern and the function of foreign capital in developing countries in a long-run perspective. The main conceptual instruments employed are the theory of economic growth, and the techniques associated with recent advances in growth econometrics. This empirical work points out that there is no mechanical trade-off between the short-term dangers and the long-run gains from capital market integration, but the growth benefits of foreign capital in transforming economies are conditional on an effective destination of the resources. Over-borrowing and excessive consumption are the main pitfalls in the short- as in the long-run. Nevertheless, foreign capital can be conducive to faster growth and possibly higher welfare.

International audience ; We investigate the effect of the political regime on bilateral FDI flows from advanced to emerging countries in the period 1992–2004. We control for country size, per capita income and privatization proceeds in the host country, and use a random-effect Tobit model to exploit information from zero entries. Our results suggest that democracy does have a positive effect on the amount and probability of FDI flows from developed to emerging countries. Moreover, we find that the effect of democracy on FDI also works through the total factor productivity channel, not only the political risk one as suggested in the literature.

We investigate the effect of the political regime on bilateral FDI flows from advanced to emerging countries in the period 1992–2004. We control for country size, per capita income and privatization proceeds in the host country, and use a random-effect Tobit model to exploit information from zero entries. Our results suggest that democracy does have a positive effect on the amount and probability of FDI flows from developed to emerging countries. Moreover, we find that the effect of democracy on FDI also works through the total factor productivity channel, not only the political risk one as suggested in the literature.

We introduce the effect of the political regime in a model of North-South bilateral foreign direct investment (FDI), and test whether it matters for the nature of FDI inflows to emerging markets. Alternative political regimes in the host country may affect the incentive for foreign investors to implement horizontal rather than vertical FDI, if the political expropriation risk is different for the two kinds of investment. We test the model in a panel of 14 source countries and 24 host countries over 1992-2004, and find that autocracies are likely to receive relatively more FDI of the vertical type, while democracies are more likely to be associated with horizontal FDI inflows. ; We introduce the effect of the political regime in a model of North-South bilateral foreign direct investment (FDI), and test whether it matters for the nature of FDI inflows to emerging markets. Alternative political regimes in the host country may affect the incentive for foreign investors to implement horizontal rather than vertical FDI, if the political expropriation risk is different for the two kinds of investment. We test the model in a panel of 14 source countries and 24 host countries over 1992-2004, and find that autocracies are likely to receive relatively more FDI of the vertical type, while democracies are more likely to be associated with horizontal FDI inflows. ; Non-Refereed Working Papers / of national relevance only

Foreign direct investment (FDI) is an instrument of international capital flow and it also shares some features of international trade flows as it is often associated with intra-firm trade by multinational corporations. Combining features from both 'growth-type' and 'gravity-type' models, we argue that democracy and economic reform in emerging economies have a joint positive impact on FDI inflows from advanced countries. This effect of democracy and economic reform is robust even when the EU membership negotiations are taken into account. We conclude that the role of democracy and market-oriented reform is robust and widespread beyond European borders. On the other hand, our results can be interpreted as evidence that prospects of joining the EU acts as an anchor for the host country. ; Foreign direct investment (FDI) is an instrument of international capital flow and it also shares some features of international trade flows as it is often associated with intra-firm trade by multinational corporations. Combining features from both 'growth-type' and 'gravity-type' models, we argue that democracy and economic reform in emerging economies have a joint positive impact on FDI inflows from advanced countries. This effect of democracy and economic reform is robust even when the EU membership negotiations are taken into account. We conclude that the role of democracy and market-oriented reform is robust and widespread beyond European borders. On the other hand, our results can be interpreted as evidence that prospects of joining the EU acts as an anchor for the host country. ; Non-Refereed Working Papers / of national relevance only

We use a spatial model of endogenous growth to investigate the likely impact of discriminatory integration between two advanced insider countries on their own welfare as well as on the welfare of an outsider transition economy. A first point is that, since convergence in per capita income levels depends on relative market access and local market size, piece‐wise integration causes insider‐outsider divergence. Nonetheless, outsiders can gain in absolute terms if integration fosters the global growth rate. We also show that exclusion from a regional agreement and on‐going transition have unpredictable joint effects on the structural adjustment, which might even exhibit a swinging behaviour. Such swings may imply large adjustment costs, which can be reduced by careful integration design. With this respect, the asymmetric phasing‐out of trade barriers built into the Europe Agreements seems to work in the right direction. Finally, we point out that the predictions of the model in terms of direct investment and terms‐of‐trade dynamics are broadly consistent with some actual developments in transition economies.