We explore how the share of the private sector in total external debt affects perceived creditworthiness and the likelihood of sovereign default in developing countries. While there are theoretical arguments both in favor and against a stabilizing role of private-sector borrowing, the evidence...

It is often argued that a saticfactory institutional quality is prerequi- site for successfull financial integration. This paper analyzes the influence of financial integration on institutional quality. We construct a dynamic politico-economic model in which the ruling elite uses its political...

We explore the effect of foreign direct investment (FDI) on economic growth in developing countries, distinguishing between mergers and acquisitions (M&As) and Greenfield investment. We find that these two types of FDI differ substantially with respect to their influence on growth. While...

This paper analyzes the determinants of people s attitudes towards FDI using a survey-based data set that covers a wide range of rich and poor countries. We find that both individual socioeconomic characteristics and macroeconomic factors shape agents attitudes towards multinational firms....

While recent studies have examined how economic shocks arising from trade competition affect voting results at the aggregate level, we know little about the individual-level mechanisms that bring such effects about. In this contribution, we use long-term individual-level panel data to study the...

This paper uses a newly constructed dataset on bilateral de-jure exchange rate regimes to estimate the effect of expected exchange rate volatility on foreign direct investment (FDI). The new dataset accounts for the fact that officially pegging to one currency is uninformative about the exchange...

This paper introduces a new effective exchange rate regime classification. Traditional classifications define the stability or flexibility of a currency with respect to one ("anchor") currency, thus implicitly neglecting information on exchange rate relationships against other currencies. Our...

We estimate the effect of “cultural distance” on bilateral trade in services. Our measure of cultural distance is based on scores that reflect individuals’ attitudes towards hierarchies, initiative, competition, uncertainty etc. Controlling for other standard ingredients of gravity...