In this paper we compare the two standard forms of international investments in developing countries, debt and foreign direct investment, from a finance perspective. It is shown that the sovereign risks associated with debt finance are generally less severe than the ones which come with FDI. FDI is chosen only if the foreign investor is more efficient in running the project, if the project is r...

We compare the effects of transactional, institutional, and experience influences on the ownership strategies of Japanese investors. Our theoretical development suggests that the equity position of a foreign investor should increase as the specificity of the assets transferred to the foreign affiliate increases, but a lower equity position should be assumed when the foreign investor requires co...

the respect of property has recognized by the grate legal systems. despite of the recognition of this rule, there are some exceptions. expropriation, nationalization, confiscation and requisition are exceptions of the respect which cause the disputes in foreign investment. however national and international authorities, have different argumentations in ether violations of the respect to determi...

This paper considers the role of foreign investors in developed country equity markets. It presents a quantitative model of trading that is built around two new assumptions about investor sophistication: (i) both the foreign and domestic populations contain investors with superior information sets; and (i i) these knowledgeable investors have access to both public equity markets and private inv...

This paper studies the strategic interaction between a foreign direct investor and a host country. We analyze how the investor can use his control rights to protect his investment if he faces the risk of “creeping expropriation” once his investment is sunk. It is shown that this hold-up problem may cause underinvestment if the bargaining position of the investor is too weak and overinvestment i...

Failure to timely identify the occurrence of various shocks in the foreign exchange market due to the close relationship with the monetary, macroeconomic, and financial uncertainty can lead to crises and imbalances. In this paper, the effect of exchange rate and investor confidence on monetary and economic uncertainty in Iran is investigated, specifying a Multivariate GARCH model and the Grange...

This study investigates the wealth effect of foreign investor presence on the domestic market before and after the announcement of lifting foreign stock ownership restrictions on September 4, 1997 in Indonesia. We find that the presence of foreign investors is associated with positive wealth effects as indicated by positive cumulative abnormal returns. The impact of this event, however, is mode...

This paper examines the value relevance of Local Accounting Standards (LAS) earnings and their voluntarily disclosed reconciliations to the International Accounting Standards (IAS). The empirical evidence is from Finland where, as discussed in our paper, restricted shares (available only to domestic investors) and unrestricted shares (available to both foreign and domestic investors) were liste...

foreign investment issue and compensation in that field constitutes one of the most important matters in contemporary international law. when an investment relation between a host state and foreign investors is formed, the parties to terminate the relations are committed to comply with the obligations they accepted. however at times, when there is an expropriation of assets of foreign investors...

This paper investigates the allocation decision of an investor who owns two projects, a domestic and a foreign one. A manager governs the expected return from each project, and the investor has less information on the actions of the foreign manager. The investor’s portfolio will be tilted relative to a situation with full information. With asymmetric information, he generally achieves a better ...