In this paper we analyze the conditions under which a foreign direct investment (FDI) involves a net capital flow across countries. Frequently, foreign direct investment is financed in the host country without an international capital movement. We develop a model in which the optimal choice of...

Government-controlled investors, including state-owned enterprises and sovereign wealth funds, have greatly expanded their international activities in recent years. This paper describes the existing policy landscape of international investments by government-controlled investors under both...