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Capital Structure with Risky Foreign Investment
Desai, Mihir A. - 2006
American multinational firms respond to politically risky environments by adjusting their capital structures abroad and at home. Foreign subsidiaries located in politically risky countries have significantly more debt than do other foreign affiliates of the same parent companies. American firms...
Persistent link: https://www.econbiz.de/10012466392
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Attracting FDI in a Politically Risky World
Janeba, Eckhard - 2001
Conventional wisdom holds that lack of government commitment deters foreign investment in developing countries. Yet this explanation is not convincing because some econometric studies have found little support for the role of political risk and host governments can offer upfront subsidies that...
Persistent link: https://www.econbiz.de/10012470320
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Investment, Openness, and Country Risk
Aizenman, Joshua - 1987
endowments and policies. The presence of country risk poses a problem for the smooth operation of international credit markets … with greater reliance on international trade The presence of country risk is shown to introduce a distortion, calling for … eliminate the fundamental problems associated with international credit …
Persistent link: https://www.econbiz.de/10012476658
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The Use of Tax Havens in Exemption Regimes
Gumpert, Anna - 2011
This paper analyzes the tax haven investment behavior of multinational firms from a country that exempts foreign income from taxation. High foreign tax rates generally encourage firms to invest in tax havens, though significant costs of reallocating taxable income dampen these incentives. The...
Persistent link: https://www.econbiz.de/10012461013
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Reserve Uncertainty and the Supply of International Credit
Aizenman, Joshua - 1999
This paper examines how increased uncertainty about an emerging market's international reserves affects the willingness … of foreign investors to supply international credits. We illustrate the relevance of this concern for South Korea during … supply of international credit if the emerging market's foreign debt is large enough or if the collapse of output forces the …
Persistent link: https://www.econbiz.de/10012471586
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Reserve Requirements on Sovereign Debt in the Presence of Moral Hazard -- on Debtors or Creditors?
Aizenman, Joshua - 1999
This paper characterizes the effects of reserve requirements on financial loans in the presence of moral hazard on the lender side (i.e., the anticipation that the taxpayer will bailout lending banks if large default will occur) and sovereign risk on the borrower side. The impacts of such...
Persistent link: https://www.econbiz.de/10012471796
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Does It Matter How Central Banks Accumulate Reserves? Evidence from Sovereign Spreads
Sosa Padilla, César; Sturzenegger, Federico - National Bureau of Economic Research - 2021
There has been substantial research on the benefits of accumulating foreign reserves, but less on the relative merits of how these reserves are accumulated. In this paper we explore whether the form of accumulation affects country risk. We first present a model of endogenous sovereign debt...
Persistent link: https://www.econbiz.de/10012585457
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Sources and Transmission of Country Risk
Hassan, Tarek A.; Schreger, Jesse; Schwedeler, Markus; … - National Bureau of Economic Research - 2021
We use textual analysis of earnings conference calls held by listed firms around the world to measure the amount of risk managers and investors at each firm associate with each country at each point in time. Flexibly aggregating this firm-country-quarter-level data allows us to systematically...
Persistent link: https://www.econbiz.de/10012696435
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Political Constraints and Sovereign Default
Azzimonti, Marina; Mitra, Nirvana - National Bureau of Economic Research - 2022
We study how political constraints, characterized by the degree of flexibility to choose fiscal policy, affect the probability of sovereign default. To that end, we relax the assumption that policymakers always repay their debt in the dynamic model of fiscal policy developed by Battaglini and...
Persistent link: https://www.econbiz.de/10012814442
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Country Risk and the Organization of International Capital Transfer
Eaton, Jonathan - 1987
Foreign portfolio investment is threatened by the risk of default and repudiation, while direct foreign investment is threatened by the risk of expropriation. These two contractual forms of investment can differ substantially in: (1) the amount of capital they can transfer from abroad to...
Persistent link: https://www.econbiz.de/10012476865