Foreign capital inflows: direct investment, equity investment, and foreign debt
Cited 0 times inCited 0 times in
- Foreign capital inflows: direct investment, equity investment, and foreign debt
- Chung, Keunsuk
- Issue Date
- Inderscience Publishers
- International Journal of Economic Policy in Emerging Economies, v.2, no.1, pp.86 - 105
- We develop a two-country stochastic growth model with production, relative price and sovereign default risks. Domestic production and relative price volatilities cause more fluctuations in the agents' portfolio decisions than the volatility of Foreign Direct Investment (FDI) production does. Both the sovereign risk and separability of FDI capital affect the composition of foreign capital inflows in two directions. The direct effect induces substitution of FDI for more Foreign Portfolio Investment (FPI) and foreign borrowing, while the indirect effect encourages FDI due to the increase in FDI's marginal contribution to the foreign agent's welfare after default.
- Appears in Collections:
- SBA_Journal Papers
- Files in This Item:
- There are no files associated with this item.
can give you direct access to the published full text of this article. (UNISTARs only)
Show full item record
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.