Private portfolio flows to a country tend to rise in response to an increase in the current account deficit, a rise in foreign direct investment flows, higher per capita income, and growth performance. The most important determinant of official lending to a developing country seems to be the...

The lower the risk of expropriation and the greater the rule of law (that is, the greater the security of property and contract rights), the greater the research and development spending in developing countries and the greater the likelihood that foreign direct investment will increase; two...