We examine the impact of capital account policies on FDI inflows. Using an annual panel dataset of 83 developing and developed countries for 1984-2000, we find that capital account openness is positively but only very moderately associated with the amount of FDI inflows after controlling for other macroeconomic and institutional measures. To a large extent, other country characteristics seem to...

We examine what is perceived as one of the main culprits in the occurrence of banking crises: financial liberalization. As is typically argued, if liberalization is accompanied by insufficient prudential supervision of the banking sector, it will result in excessive risk taking by financial intermediaries and a subsequent crisis. Having evaluated the empirical validity of this hypothesis, we co...

Article history: Received 8 August 2011 Received in revised form 23 May 2012 Accepted 31 May 2012 Available online 13 June 2012 This paper shows that financial integration may reduce welfare in the presence of nominal price rigidity. From a policy perspective, the model implies that developing countries that are experiencing financial integration may attempt to alleviate the welfare cost of int...

This paper develops a model of the circumstances under which it is beneficial to participate in a currency area. The proposed two-country monetary model of trade with nominal rigidities encompasses the real and monetary arguments suggested by the optimum currency area literature: correlation of real and monetary shocks, international factor mobility, fiscal adjustment, openness, difference in n...

We collect information about multinational banks’ internal capital markets from interviews with over 400 bank CEOs across emerging Europe. Using these unique data, we document substantial variation in how banks financially manage foreign subsidiaries and then assess how this variation affected local credit growth during the Great Recession. We show that subsidiaries grew faster if the parent ba...

The accession of several Central and Eastern European Countries to Euroland is likely to be realised within the next years. Some studies aim at analysing the suitability of these Euro aspirants for currency union with EMU by evaluating the related macroeconomic costs. Still, they are prone to the Lucas critique since they do not consider endogeneity of the relevant criteria. We build on methodo...

Article history: Received 6 August 2014 Received in revised form 14 November 2015 Accepted 16 November 2015 Available online 26 November 2015 This paper examines the incentives of national regulators to coordinate capital adequacy requirements in the presence of systemic risk in global financial markets. In a two-country model, correlated asset fire sales by banks generate systemic risk across ...

This paper investigates the implications of external indebtedness and international …nancial integration on the e¤ects of foreign interest rate shocks in a small-open economy. The theoretical component of the analysis develops a business cycle model that can successfully match the impulse responses of the Turkish economy to U.S. interest rate shocks. It is found in the context of this model tha...

Design of contracts that define firm, and their accounting systems depend on the conditions in the firm’s factor and product markets. We examine the fundamental difficulty of defining and developing "uniform" accounting for diverse economic environments across countries and compare the differences in conditions prevailing in some key markets in Japan and the United States. There are important d...

Article history: Received 30 August 2009 Accepted 15 May 2010 Available online 1 July 2010 In this paper, we examine the pattern of historical evolution of international earnings-to-price ratios for a sample of 17 developed markets over the period 1980–2008. Using a measure of distance between earnings-to-price ratios of international stock markets, we find that earnings-to-price ratios of 17 m...