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The textbook neoclassical growth model predicts that countries with faster productivity growth should invest more and attract more foreign capital. We show that the allocation of capital flows across developing countries is the opposite of this prediction: capital does not flow more to countries...
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According to the consensus view in growth and development economics, cross country differences in per-capita income largely reflect differences in countries' total factor productivity. We argue that this view has powerful implications for patterns of capital flows: everything else equal,...
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This article analyzes the historical patterns of foreign investment in Latin America and the recent Mexican financial … crisis in order to examine the appropriate form of foreign investment in developing countries. It argues that these nations … should increase foreign investment flows into their economies by focusing on encouraging relational investments. Relational …
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