This paper develops and estimates a statistical model of foreign investment flows in Canada in order to determine the degree to which Canadian foreign direct investment (FDI) policies affected these flows. Theoretical considerations suggest that host government policies directed at inward foreign investment (FDI) also influence outward direct investment (ODI), especially investment by affiliate...

We make use of a new and detailed database on FDI approvals since the early 1990s to address two major issues related to FDI and regional development in India in the postreform period. First, we analyze the location choices of foreign investors. The evidence indicates that the concentration of FDI in a few relatively advanced regions may have prevented FDI effects from spreading across the Indi...

Diskussionspapiere stehen in der alleinigen Verantwortung des jeweiligen Autors. Die darin vertretenen Auffassungen stellen keine Meinungsäußerung des IWH dar. Anregungen und kritische Bemerkungen zu den dargestellten Untersuchungsergebnissen sind jederzeit willkommen und erwünscht. Abstract The paper investigates the investment decision of a financially constrained multinational corporation (M...

In Azotobacter vinelandii, deletion of the fdxA gene that encodes a well characterized seven-iron ferredoxin (FdI) is known to lead to overexpression of the FdI redox partner, NADPH:ferredoxin reductase (FPR). Previous studies have established that this is an oxidative stress response in which the fpr gene is transcriptionally activated to the same extent in response to either addition of the s...

This paper discusses the impact of foreign direct investment (FDI) on market entry and welfare. It assumes that firms may enter markets in the first period as national firms only. In the second period, however, FDI is possible. The paper demonstrates that FDI reduces market entry because equilibrium profits in the second period decline with a decrease in the fixed cost of FDI. Therefore, compar...

This paper examines the determinants of FDI from U.S. and Japan in China using the provincial data set from 1991 to 1997. The results of the regression analyses are further compared to those of the aggregated FDI as a benchmark case. The study found various similarities and differences in the importance and the magnitudes of the determinants of FDI among three FDI sources. It is shown that both...

We study the dynamics of FDI entry under a setting with firm heterogeneity and FDI uncertainty. The risk of FDI failure depends positively on the complexity of production technology, negatively on the quality of infrastructure in the host country, and evolves over time with the extent of knowledge diffusion. The incorporation of FDI uncertainty leads to a non-monotonic relationship between tech...

Using unpublished data on foreign affiliates of South Korea for 2000-2004, we examine two possible motivations of foreign direct investment (FDI): factor proportion (vertical-FDI) or market access (horizontal-FDI). First of all, we find clear evidence of vertical FDI, which is considered an important part of the overall picture of South Korean FDI. Affiliate sales destined for exporting to the ...

Economic theory provides two main explanations why changes in exchange rates can affect foreign direct investment (FDI). According to a first explanation, FDI reacts to exchange rate changes if there are information frictions on capital markets and if the investment by firms depends on their net worth (capital market friction hypothesis). According to a second explanation, FDI reacts to exchang...

Evidence on international capital ‡ows suggests that foreign direct investment (FDI) is less volatile than other ...nancial ‡ows. To explain this ...nding, I model international capital ‡ows under the assumptions of imperfect enforcement of ...nancial contracts and inalienability of FDI. Imperfect enforcement of contracts leads to endogenous ...nancing constraints and the pricing of default ris...