The purpose of this study is to draw attention to the linkages between country risk and the openness of an economy, and to demonstrate that in the long run the openness of an economy is endogenously determined by the interaction between endowments and policies. The presence of country risk poses...

The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and...

This paper highlights the crucial role played by international access to intermediate inputs to explain firm-level performance, via two channels simultaneously: trade and FDI. We develop a simple theoretical model showing that trade integration of input market entails an efficiency improvement...