This paper examines the role of country-specific sources of output and interest rate or exchange rate volatility in driving FDI activities. Building on a dataset with bilateral FDI flows among 24 OECD economies over the period 1985-2007, we find that nominal and real volatility strongly deter...

This paper investigates the role of output fluctuations and exchange rate volatility in driving US foreign direct investments. Using a sample of 46 economies over the period 1982-2009, we provide evidence of a positive relation between US FDI and host country's cyclical conditions. Allowing for...

Multiple dimensional shifts related to firm-level multinationalization spill over to the aggregate realm as an unusually large mass of US firms multinationalized in the late-1990s. Firms become considerably different in many aspects as they transform into multinational enterprises (MNEs),...

In this paper, we examine how the business and interest rate cycles in developed countries affects FDI to developing countries. After aggregating flows into three big source areas (the U.S., Europe and Japan), we find FDI flows to be countercyclical with respect to both output and interest rate...

The protracted recession in the euro area will continue to be a drag on the economic growth of most CESEE countries in 2013. By and large, those countries are small open economies held hostage to the excessive fiscal austerity pursued in the euro area and the sluggish progress on the part of its...

This note discusses the external environment, economic outlook, and key policy challenges for the six South East European Countries (SEE6) — Albania, Bosnia and Herzegovina (BIH), Kosovo, the former Yugoslav Republic (FYR) of Macedonia, Montenegro, and Serbia — as they seek to reignite...

This article analyses the 1989-2005 economic growth in the transitional economies in Europe and Central Asia, and signals factors that help to explain the differences in outcome. An econometric analysis finds prominent indices of property rights, corruption, economic freedom, tax incidence and...

This study demonstrates that the interactions of firm-level indivisible investments give rise to aggregate fluctuations without aggregate exogenous shocks. When investments are indivisible, aggregate capital is determined by the number of firms that invest. I develop a method to derive the...

This paper attempts to test whether financial supply-side shifts explain the low-investment climate of private firms in Germany. The core contention is that a firm's financial position contributes to its access to external finance on credit markets. Special emphasizes is put on small and...