Does Foreign Portfolio Investment Reach Small Listed Firms?

Does direct foreign investment affect domestic firms credit constraints ? ∗

Firms in developing countries typically cite credit constraints as one of their primary obstacles to investment. By bringing in scarce capital, it is often argued that foreign direct investment may ease domestic firms’ credit constraints. Alternatively, if foreign firms borrow heavily from domestic banks, they may exacerbate domestic firms’ credit constraints by crowding them out of domestic ca...

Outward foreign direct investment of publicly listed firms from China: A corporate governance perspective

This study examines the influence of key corporate governance factors on the internationalization decisions of emerging economy (EE) firms. By integrating the resource-based view and agency theory, it investigates the effects of controlling owner identity, non-controlling shareholder ownership, and the interactions of these with CEO power, in order to reveal their individual and joint effects o...

Small Firms’ Investment:

Taking the Bad with the Good: Volatility of Foreign Portfolio Investment and Financial Constraints of Small Firms

This paper examines the impact of the volatility of foreign portfolio investment on the financial constraints of small firms. Utilizing a dataset of over 195,000 firm-year observations across 53 countries, I examine the impact of foreign portfolio investment instability on capital issuance and firm growth across countries and firm characteristics, in particular size. After controlling for the e...

Foreign Portfolio Investment and Corporate Innovation

We investigate whether foreign institutional ownership impacts corporate innovation. Using firm-level data from 30 countries in 2001-2010, we find that higher foreign institutional ownership is associated with more investment in R&D and patents. Using the exogenous increase in foreign institutional holdings that follows a firm’s addition to the Morgan Stanley Capital International World Index, ...