International Finance Discussion Papers: Foreign Portfolio Investment, Foreign Bank Lending, and Economic Growth (Paperback) (ISBN-13: 9781288729753)

In contrast to the empirical literature's focus on foreign direct investment (FDI), this study examines the effects of foreign portfolio investment (FPI) and "other" foreign investment (OFI) on economic growth using data on 88 countries from 1977 through 2000. Most measures suggest that FPI has no effect, and some results indicate that OFI has a negative impact on growth that is somewhat mitigated by initial financial and/or legal development. However, these results are questionable due to possible simultaneity bias. The empirical analyses also examine whether non-FDI foreign investment affects growth indirectly. FPI does not correlate positively with macroeconomic volatility, but the results indicate that the negative indirect effect of OFI through macroeconomic volatility comprises a substantial portion of the gross negative effect of OFI on growth.

Author: J. Benson Durham
ISBN-10: 1288729758
ISBN-13: 9781288729753
Publisher: Bibliogov
Language: English
Published: 02/08/2013
Pages: 38
Format: Paperback
Weight: 0.19lbs
Size: 9.69h x 7.44w x 0.08d