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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
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How Big are the Gains from International Financial Integration?
Hoxha, Indrit - 2009
The literature has shown that the implied welfare gains from international financial integration are very small. We revisit the existing findings and document that welfare gains can be substantial if capital goods are not perfect substitutes. We use a model of optimal savings that includes a...
Persistent link: https://www.econbiz.de/10012464013
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Trade, Diffusion and the Gains from Openness
Rodriguez-Clare, Andres - 2007
Building on Eaton and Kortum's (2002) model of Ricardian trade, Alvarez and Lucas (2005) calculate that a small country representing 1% of the world's GDP experiences a gain of 41% as it goes from autarky to frictionless trade with the rest of the world. But the gains from openness, which...
Persistent link: https://www.econbiz.de/10012464979
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Y2K and Offshoring : The Role of External Economies and Firm Heterogeneity
Mitra, Devashish - 2005
We construct a model of offshoring with externalities and firm heterogeneity. Due to the presence of externalities, temporary shocks like the Y2K problem can have permanent effects, i.e., they can permanently raise the extent of offshoring in an industry. Also, the initial advantage of a country...
Persistent link: https://www.econbiz.de/10012466954
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The Elusive Gains from International Financial Integration
Gourinchas, Pierre-Olivier - 2003
Standard theoretical arguments tell us that countries with relatively little capital benefit from financial integration as foreign capital flows in and speeds up the process of convergence. We show in a calibrated neoclassical model that conventionally measured welfare gains from this type of...
Persistent link: https://www.econbiz.de/10012469014
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Transition to FDI Openness : Reconciling Theory and Evidence
McGrattan, Ellen R. - 2011
conclusive evidence that they are positive, as theory predicts. This paper shows that the lack of empirical evidence is … consistent with theory if countries are in transition to FDI openness. Anticipated welfare gains lead to temporary declines in … reconciliation of theory and evidence is accomplished with a multicountry dynamic general equilibrium model parameterized with data …
Persistent link: https://www.econbiz.de/10012461883
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Investment and Capital Constraints : Repatriations Under the American Jobs Creation Act
Faulkender, Michael - 2009
The American Jobs Creation Act (AJCA) significantly lowered US firms' tax cost when accessing their unrepatriated foreign earnings. Using this temporary shock to the cost of internal financing, we examine the role of capital constraints in firms' investment decisions. Controlling for the...
Persistent link: https://www.econbiz.de/10012463401
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Trade Reform with a Government Budget Constraint
Anderson, James E. - 1996
The standard theory of trade reform uses a passive government budget constraint, in which changes in tariff revenue are …
Persistent link: https://www.econbiz.de/10012473001
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The Significance of International Tax Rules for Sourcing Income : The Relationship Between Income Taxes and Trade Taxes
Mutti, John - 1996
This paper examines how rules to determine the source of income internationally for tax purposes can have important effects on the form in which taxable income is reported and on the location of economic activity. In the case of U.S. law, two provisions are significant: allowing a portion of...
Persistent link: https://www.econbiz.de/10012473330
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Currency Incontrovertibility, Trade Taxes and Smuggling
de Macedo, Jorge Braga - 1987
In the classic analysis of smuggling importers choose the optimal mix of legal and illegal trade, given trade taxes and the technology of detection. This paper introduces an inconvertible currency in the framework, so that illegal trade is valued at a rate higher than the (fixed) official...
Persistent link: https://www.econbiz.de/10012476893