Curse of Friendship: IMF Program, Friendship with the United States, and Foreign Direct Investment

نویسندگان

چکیده

How do investors respond when a country participates in an International Monetary Fund (IMF) programme? While there exists some optimism and around the IMF on catalytic effect of programme, empirical research finance reports rather diverse findings; contrary to most theoretical research, studies report both positive negative effects as well null effects. This paper revisits question whether how programme catalyses other finances, focusing foreign direct investment (FDI). We modify core logic behind identify conditions under which is more likely catalyse FDI: we highlight credibility key determinant any it may have reason that politically motivated lending by can attenuate programme’s credibility, depressing effect. empirically capture looking at relationship between borrowing United States demonstrate loans countries closely aligned with are less FDI than not States.

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ژورنال

عنوان ژورنال: The World Economy

سال: 2021

ISSN: ['1467-9701', '0378-5920']

DOI: https://doi.org/10.1111/twec.13234