This article uses co-integration and related techniques to test for a long-run causal relationship between the fiscal and external deficits of three post-transition countries in Central and Eastern Europe. In addition, an import propensity model is tested by applying OLS and GMM. All the results reject the Twin Deficits Hypothesis. Instead, the results demonstrate that specific transition facto...

he dramatic growth in private capital flows to lowincome countries (LICs) around the world over the past quarter century is one of the good news stories of development. Capital flows and capital-like flows, such as aid grants and remittances that can substitute for capital flows, are at historic highs, spearheaded by a sharp rise in foreign direct investment in LIC economies. While government-t...

attracting export-platform foreign direct investment (FDI), and the increased FDI inflows of the 1990s are widely agreed to have been one of the most important factors in generating the remarkable boom that the country experienced over that decade. The present paper considers the confluence of factors – domestic policy changes, fortuitous developments in the European and global economic environ...

The study investigates the impacts of official development assistance (ODA) on the inflows of foreign direct investment (FDI) in 64 provinces of Vietnam in 2002–2004. These impacts are examined using both the two-stage least squares method and the fixed effects/random effects model. The regression results give evidence of the positive impacts of ODA in infrastructure on FDI inflows, not only by...

Hedge funds attempting to take advantage of market-wide liquidity shocks are not limited by opaqueness-caused capital constraints, because banks optimally supply them with backup credit lines. During such shocks, government-protected bank deposits receive inflows that lower a bank’s opportunity cost of lending. The inflows also provide a private signal that helps the bank estimate the timing an...

We examine the intersection between corporate divestitures of tangible assets and investment in intangible capital (R&D) to provide new tests for the impact financing constraints have on real activity. A positive R&D sensitivity to asset sale proceeds indicates binding financing constraints since cash inflows from tangible asset sales are negatively correlated with productivity shocks and not o...

Using a quarterly panel of 98 advanced as well emerging and developing countries from 1990 to 2017, this paper shows that domestic variables are significantly related the probability incurring sharp reversals in capital inflows controlling for global push factors. In particular, negative growth shocks combined with high levels leverage private sector significant determinant sudden stops. This i...