Capital flows, institutional quality and terms of trade
This paper studies the relationship between FDI and the TOT in the less developed countries in response to the institutional quality that each presents. Our hypothesis is that the least developed countries with low institutional quality are reluctant to invest Rodrik [2007], suffer from credit const...
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| Autores principales: | , , |
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| Formato: | conferenceObject |
| Lenguaje: | Inglés |
| Publicado: |
Asociación Argentina de Economía Política
2022
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| Materias: | |
| Acceso en línea: | http://hdl.handle.net/11086/22942 |
| Aporte de: |
| Sumario: | This paper studies the relationship between FDI and the TOT in the less developed countries in response to the institutional quality that each presents. Our hypothesis is that the least developed countries with low institutional quality are reluctant to invest Rodrik [2007], suffer from credit constraints Agénor and Aizenman [2004], and face an endogenous risk premium given the asymmetries of information, depend on their collateral Gertler and Rogoff [1990], closely linked to the behavior of their TOT. We found that the coefficient that measures the response of FDI to TOT is decreasing with institutional quality. Countries
with low quality experience a penalty for having low institutional quality. |
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