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Excessive FDI Flows Under Asymmetric Information

Razin, Assaf - 1999

In Razin, Sadka and Yuen (1998, 1999a), we explored the policy implications of the home-bias in international portfolio investment as a result of asymmetric information problems in which domestic savers, being 'close' to the domestic market, have an informational advantage over foreign portfolio...

Persistent link: https://www.econbiz.de/10012471385

An Information-Based Model of Foreign Direct Investment : The Gains from Trade Revisited

Razin, Assaf - 1999

Foreign direct investment (FDI) is observed to be a predominant form of capital flows to emerging economies, especially when they are liquidity-constrained internationally during a global financial crisis. The financial aspects of FDI are the focus of the paper. We analyze the problem of...

Persistent link: https://www.econbiz.de/10012471927

Quantitative Implications of the Home Bias : Foreign Underinvestment, Domestic Oversaving, and Corrective Taxation

Razin, Assaf - 1997

There is strong evidence about a home-court advantage in international portfolio" investment. One explanation for the bias is an information asymmetry between domestic and" foreign investors about the economic performance of domestic firms. This asymmetry causes" two types of distortions: an...

Persistent link: https://www.econbiz.de/10012472476

Channeling Domestic Savings into Productive Investment Under Asymmetric Information : The Essential Role of Foreign Direct Investment

Razin, Assaf - 1997

Foreign direct investment (FDI) is observed to be a predominant form of capital flows to low and middle income countries with insufficiently developed capital markets. This paper analyzes the problem of channeling domestic savings into productive investment in the presence of asymmetric...

Persistent link: https://www.econbiz.de/10012472477

The Informativeness Principle Under Limited Liability

Chaigneau, Pierre - 2014

This paper shows that the informativeness principle does not automatically extend to settings with limited liability. Even if a signal is informative about effort, it may have no value for contracting. An agent with limited liability is paid zero for certain output realizations. Thus, even if...

Persistent link: https://www.econbiz.de/10012458212

Why International Equity Inflows to Emerging Markets are Inefficient and Small Relative to International Debt Flows

Razin, Assaf - 2001

whole with the following features: low-productivity firms rely on the equity market to finance investment at a relatively … low level; medium-productivity firms do not invest at all; and high-productivity firms rely on the debt market to finance …-sum subsidies to those firms that choose to equity-finance their investment (i.e., equity-market-contingent grants) …

Persistent link: https://www.econbiz.de/10012470056