The interpretation of the correlation between cash flow and investment is highly controversial. Some argue that it is caused by financial constraints, others by the correlation between cash flow and investment opportunities that are not properly measured by Tobin’s Q...

This paper examines the interactions between Foreign Direct Investment (FDI), inequality, and growth, both from a theoretical and an empirical point of view. We set up a growth model of a dual economy in which the traditional (agricultural) sector uses a diminishing returns technology, while FDI...