We estimate gravity-type models to assess the effects of financial market development in the host and source countries on bilateral FDI stocks. We address potential reverse causality, inter alia by performing instrumental variable estimations and restricting the sample to observations where...

It is open to question whether the intensified worldwide competition for FDI has reduced its traditionally strong concentration in a few large and relatively advanced host countries. We calculate and decompose Theil indices to track changes in absolute and relative concentration of FDI during...

The recent boom of investor-state disputes filed under international investment agreements has fueled a controversial academic and policy debate. Despite its importance, there has been very little work to date on the impacts of compensation claims by investors on FDI flows to the responding host...

Globalization improves the prospects for developing countries (DCs) to catch up economically with industrialized countries. Depending on economic policies with respect to openness and factor accumulation, globalization may increase capital and technology flows to DCs, thereby generating a higher...

One key focus of the on-going debate on the integration of international financial markets have been measures to lengthen the maturity of foreign debt. Short-term debt is typically considered to be volatile and thus a potential trigger of currency crises. In contrast to the vivid policy debate...

We consider two channels via which foreign inputs into industrial production may lead to productivity effects. The first one concerns dynamic externalities between firms which share technical and organizational knowledge which is vital for the productivity growth of a particular industry. We...

The Eastern enlargement of the European Union (EU) is likely to give a further boost to trade and capital flows, yet empirical evidence on the possible magnitudes is still scarce. This paper uses four different datasets to estimate the determinants of international asset holdings and trade...

Trade in intermediate goods as one possible link between rising trade and foreign direct investment is examined. To explain growing intermediate goods trade, three hypotheses are brought forward: outsourcing, global sourcing and the increasing importance of MNE networks. These hypotheses are...

This article focuses on an apparent conflict between the standard trade theory and available empirical evidence on factor flows. Theoretically, labor and capital flows must be substitutes. However, empirical papers find migration and FDI to be either substitutes or complements, depending upon...

Information costs and regulatory barriers are the main distinguishing features of international financial markets as compared to national financial markets. This paper presents a simple model of the impact of these factors on banks' cross-border activities and provides empirical evidence. Our...