We propose new generalized method of moments (GMM) estimators for the number of latent factors in linear factor models. The estimators are appropriate for data with a large (small) number of cross-sectional observations and a small (large) number of time series observations. The estimation...

We analyse the effect of corruption on FDI. Using FDI outflows from a sample of East European transition economies that had virtually no outward FDI before 1995, we observe FDI flows based mainly on current investment decisions and less on the inertia of past investments. Our model separates the...

What determines the price of insurance against default of advanced economies? Our laboratory to answer this question is the credit default swap (CDS) market on government debt of 18 advanced economies. The price of credit protection on these countries shows a strong degree of co-movement, has...