Evidence on productivity spillovers from FDI to domestic firms is ambiguous. Incorrect estimation procedures may be one of the sources for the contradictory results obtained in empirical studies on this subject. We observe that inadequacy of the estimation procedures leads to a severe...

Foreign direct investment (FDI) flows into developing countries have been increasing dramatically over the past decade. At the same time, there has been widespread concern that lax environmental standards are in part responsible for this surge. This paper revisits the pollution haven hypothesis...

The environmental impact of Foreign Direct Investment is still to be explored totally. It is often argued that investment may come to a region or country where environment protection norms are less strict. Investors may be induced to outsource their pollution-intensive production where the...

The environmental impact of Foreign Direct Investment is still to be explored totally. It is often argued that investment may come to a region or country where environment protection norms are less strict. Investors may be induced to outsource their pollution-intensive production where the...

What macroeconomic and financial variables play key roles in the foreign direct investment decision (FDI) of firms? This question is addressed in this paper using a large panel data set of cross-border Merger & Acquisition (M&A) deals for the period 1990-1999. Various econometric specifications...

Recent empirical studies of the determinants of multinational activity across countries have found overwhelming support for a horizontal rather than a vertical model of foreign direct investment (FDI). They all use U.S. or other developed country data. This paper, in contrast, uses a previously...

The paper explores the impacts of heterogeneity in degree of relative risk aversion on the balance on current account in a two-country endogenous growth model. It concludes that, like the heterogeneity of demographic changes, the heterogeneity in degree of relative risk aversion generates...

Strategies for trade liberalization in developing countries when time preference rates are heterogeneous across countries are examined in the context of endogenous growth. The paper concludes that the best strategy for a developing country with the higher rate of time preference is generally the...

The paper attempts to analyze the implications of foreign capital inflow in a small open economy with a non-traded intermediary on the welfare and urban unemployment in a three- sector Harris-Todaro (1970) framework. The standard immiserizing result of a foreign capital inflow has been found to...

The fiscal tug-of-war between two countries to play host to a foreign- owned firm is like a Nash game. Suppose that the countries are not sure how much the firm values the sites that they offer to it. Also suppose that the countries fashion their expectation of site value by assigning the same...