To examine the impact of capital endowment and credit constraint on firms¡¯ FDI decisions, we build a model of investment portfolio based on heterogeneous firms setup. We find that financial factors matter for firms¡¯ internationalization. More capital endowment or less credit constraint...

This study investigates how heterogeneous firms choose their lenders when they raise external finance for Foreign Direct Investment (FDI) and how the choice of financing structure affects FDI activities. We establish an asymmetric information model to analyze why certain firms use private bank...

Based on a heterogeneous firm set-up, we model firms’ access to the internal capital market, bank finance as well as bond finance and investigate how firms’ adjustment among multiple sources of finance affects their performance in foreign direct investment and aggregate industry...

Equilibrium exchange rate is a key concept to measure whether the RMB exchange rate is undervalue or overvalued. This paper try to calculate the equilibrium exchange rate from 1985 to 2013 by the reduced-form equation which provided by Clark and Ronald Macdonald (1988). The exchange rate...