The findings of empirical studies on the question whether endowments with natural resources are a curse or a blessing are ambiguous. The majority of studies found that resource rich countries grow slower than their resource scarce counterparts (“resource curse”). In recent studies, this...

This paper provides a theoretical model that explains the empirical observation that foreign banks from industrialized countries tend to increase their involvement in emerging markets during periods characterized by instabilities. In this model, domestic banks have more 'soft' information about...