The cyclical nature of FDI flows

In this paper, we examine how the business and interest rate cycles in developed countries affects FDI to developing countries. After aggregating flows into three big source areas (the U.S., Europe and Japan), we find FDI flows to be countercyclical with respect to both output and interest rate cycl...

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Autores principales: Levy Yeyati, Eduardo, Panizza, Ugo, Stein, Ernesto
Formato: Documento de trabajo acceptedVersion
Lenguaje:Inglés
Publicado: Universidad Torcuato Di Tella. Escuela de Negocios. Centro de Investigaciones en Finanzas (CIF) 2018
Materias:
Inversiones extranjeras
Análisis financiero
Análisis comparativo
Relaciones económicas internacionales
Acceso en línea:http://repositorio.utdt.edu/handle/utdt/10761
Aporte de:
Repositorio Digital Universidad Torcuato Di Tella de Universidad Torcuato Di Tella
id I57-R16320.500.13098-10761
record_format dspace
institution Universidad Torcuato Di Tella
institution_str I-57
repository_str R-163
collection Repositorio Digital Universidad Torcuato Di Tella
language Inglés
orig_language_str_mv eng
topic Inversiones extranjeras
Análisis financiero
Análisis comparativo
Relaciones económicas internacionales
spellingShingle Inversiones extranjeras
Análisis financiero
Análisis comparativo
Relaciones económicas internacionales
Levy Yeyati, Eduardo
Panizza, Ugo
Stein, Ernesto
The cyclical nature of FDI flows
description In this paper, we examine how the business and interest rate cycles in developed countries affects FDI to developing countries. After aggregating flows into three big source areas (the U.S., Europe and Japan), we find FDI flows to be countercyclical with respect to both output and interest rate cycles in the first two, whereas in Japan they display either no cyclical behavior or mild procyclical behavior. This finding is consistent with the fact that FDI outflows and local investment tend to move in opposite directions during the cycles in the U.S. and Europe, reflecting investors’ arbitrage among different investment opportunities. In sum, and contrary to what is usually claimed, we conclude that recessions in industrial countries are likely to increase FDI flows, particularly to those countries with close ties with the U.S. and Europe.
format Documento de trabajo
acceptedVersion
author Levy Yeyati, Eduardo
Panizza, Ugo
Stein, Ernesto
author_facet Levy Yeyati, Eduardo
Panizza, Ugo
Stein, Ernesto
author_sort Levy Yeyati, Eduardo
title The cyclical nature of FDI flows
title_short The cyclical nature of FDI flows
title_full The cyclical nature of FDI flows
title_fullStr The cyclical nature of FDI flows
title_full_unstemmed The cyclical nature of FDI flows
title_sort cyclical nature of fdi flows
publisher Universidad Torcuato Di Tella. Escuela de Negocios. Centro de Investigaciones en Finanzas (CIF)
publishDate 2018
url http://repositorio.utdt.edu/handle/utdt/10761
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