Financial Globalization in Emerging Countries: Diversification vs. Offshoring

Globalization, offshoring and jobs

The labour market consequences of globalization in general, and offshoring in particular, have been hotly debated in recent public discussions and academia, in particular in industrialized countries. One of the reasons for this may be illustrated with reference to the World Investment Report 2004 (UNCTAD, 2004), which provides examples of recent offshoring cases in services industries in the Un...

Financial Globalization and Emerging Market Portfolios

Although emerging market Asian economies have experienced high growth without crises for close to a decade, many commentators find the large buildup of foreign exchange reserves among these economies both puzzling and evidence of incipient global imbalances. This paper reviews some of the experience of Asian countries over the last decade. We focus on the degree to which Asian economies have ex...

Financial Globalization, Portfolio Diversification, and the Pattern of International Trade

The paper provides a general equilibrium model to show how the incompleteness of international financial markets leads to insufficient industrial specialization and a depressed volume of goods trade. As international portfolio diversification is limited and productivity is uncertain, investors wish to maintain a diversified industrial structure, not specializing according to their comparative a...

Democratization and Globalization in Emerging Market Countries: An Econometric Study*

Financial Globalization and Emerging Markets: With or Without Crash?

We analyze the impact of ...nancial globalization on asset prices, investment and the possibility of crashes driven by self-ful...lling expectations in emerging markets. In a two-country model with one emerging market (intermediate income level) and one industrialized country (high income level), we show that symmetric liberalization of capital out‡ows and in‡ows increases asset prices, investm...