By combining new data on bilateral asset holdings with data on securities regulation in an empirical gravity model, it is found that bilateral differences in securities regulation lead to decreased portfolio holdings. Hence, regulatory harmonization can foster financial integration. The results...

Since July 2007 the world economy has experienced a severe financial crisis originating in the U.S. housing market. The crisis has subsequently spread to the financial sectors in European and Asian economies and led to a severe worldwide recession. The existing literature on financial crises...

The major strand of finance literature understands market efficiency through the market’s ability to process information into prices. Another strand of literature refers to the economists’ usual sense of the word, i.e. that markets ensure that resources are allocated to their most profitable...

Previous research has been inconclusive as regards the effect of outward foreign direct investment (FDI) on domestic investments. In this article we show that this inconclusiveness can be explained at a disaggregated level as a function of the way industries are organized. Based on a simple...

This chapter focuses on the role of corporate financial strategies to improve firms’ market valuations, and thus lower their cost of capital. The identification of successful strategies is accomplished within an overall strategic framework and related to how the firm perceives the degree of...

This paper attempts to measure the size of South-South FDI in developing East Asia and the trends in it, and the characteristics of the investing countries and the investments themselves. It also summarizes the findings of studies in individual countries of the effects of these investments. The...

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Foreign direct investment has been of great importance in economic growth and global economic integration over the last decades. South East Asia has been part of this development with rapidly increasing inflows of FDI. However, there are large variations over time and between countries in the...

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We propose a simple model to analyze the widespread idea that a necessary condition for firms to make foreign direct investments is that they have firm-specific advantages with respect to host country firms. We show that no such advantages are necessary to become multinationals. Further, firms...