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Foreign Capital (foreign + capital)
Selected AbstractsLABOUR MARKET DISTORTION, TECHNOLOGY TRANSFER AND GAINFUL EFFECTS OF FOREIGN CAPITAL,THE MANCHESTER SCHOOL, Issue 2 2005SARBAJIT CHAUDHURI This paper purports to show that even in a 2 × 2 full-employment production structure, an inflow of foreign capital may be welfare improving in the presence of labour market distortion. However, the existence of labour market distortion is a necessity to obtain this unconventional result. If an inflow of foreign capital is accompanied by labour market reform, the possibility of welfare gain due to foreign capital diminishes. Therefore, there may exist a trade-off between the policies of growth with foreign capital and labour market reform. However, if the inflow of foreign capital is accompanied by a labour-augmenting type technology transfer, it is found that investment liberalization policy and labour market reform may be undertaken concurrently in a developing economy. [source] FOREIGN CAPITAL AND EFFICIENCY IN DEVELOPING COUNTRIESBULLETIN OF ECONOMIC RESEARCH, Issue 4 2008Camilla Mastromarco O47; O57 ABSTRACT This paper uses stochastic frontier methodology to analyse foreign direct investment, imported capital goods and human capital as channels for increased efficiency in less-developed countries. Empirical investigation reveals that developing countries differ with respect to the efficiency with which they use frontier technology. Foreign direct investment and human capital play a significant and quantitatively important role in explaining these differences. [source] OPTIMAL FOREIGN BORROWING REVISITEDTHE JAPANESE ECONOMIC REVIEW, Issue 3 2010HYEON-SEUNG HUH Foreign capital has become increasingly important in financing investment and growth in developing countries. Foreign capital flows, however, can be volatile as is evident from the recent financial crises. It has also recently been noted by researchers that there is little systematic empirical evidence that foreign capital contributes to the economic growth of developing countries. In this context, this paper attempts to theoretically reevaluate the borrowing behaviour of a developing economy that relies on foreign borrowing for its capital formation. In particular, this paper investigates the implications of different lending policies of international financial institutions. It is found that no matter whether the borrowing interest rate increases with the level of foreign debt per capita or with the foreign-capital/total-capital ratio, the economy always moves toward the stationary state. The result holds even when the representative agent regards the interest rate given as constant. This implies that foreign borrowing does help economic growth, irrespective of lending policies of international financial institutions. [source] Tailored for Panama: Offshore Banking at the Crossroads of the AmericasGEOGRAFISKA ANNALER SERIES B: HUMAN GEOGRAPHY, Issue 1 2002Barney Warf With the steady integration of a deregulated world of hypermobile capital, offshore banking has become an increasingly significant part of the geography of international finance. Many interpretations tend to treat offshore banking centres as identical sites of investment that can be easily substituted for one another by completely mobile, fungible capital. This paper explores the nature of offshore banking in one largely overlooked centre, Panama. It charts the historic context that led to the creation of Latin America's most important centre of international banking, emphasizing the unique qualities that stand in contrast to hyperglobalist interpretations, including the Canal and the role of the US dollar. Second, it summarizes the regulatory changes initiated in the face of global neoliberalism, including the absence of a central bank and recent reforms designed to attract foreign capital. Using primary and secondary data, the paper maps Panama's growing role as a net capital exporter, charting domestic and foreign loan markets. Finally, it also addresses the trade,offs between confidentiality, and transparency in the context of illicit activities frequently alleged to occur in offshore banking centres, which in Panama revolve around drug trafficking and money laundering. It concludes by noting that even in an ostensibly seamless world, offshore banking exhibits the place,based embeddedness of financial capital within local institutional relations. [source] Capital Inflows, Resource Reallocation and the Real Exchange Rate,INTERNATIONAL FINANCE, Issue 2 2008Emmanuel K. K. Lartey A large capital inflow to a developing economy can potentially cause a real exchange rate appreciation that is detrimental to the prospects of its tradable sector; a phenomenon known as the Dutch Disease. I analyse the effects of both the level and share of capital inflow on resource reallocation and real exchange rate movements in a small open economy. I find that there exists a trade-off between resource reallocation and the degree of real exchange rate appreciation. In particular, the less labour the tradable sector loses to the non-tradable sector, the greater is the real exchange rate appreciation. This result is driven by the share of investment accounted for by foreign capital, and suggests that an emerging market economy that adopts a production technique which utilizes a greater share of foreign capital relative to domestic capital will be more susceptible to the Dutch Disease following an increase in capital inflow. The results also imply that a policy designed to minimize real exchange rate appreciation during capital inflow episodes should encompass measures aimed at stabilizing prices of non-tradables. [source] Home Bias, Foreign Mutual Fund Holdings, and the Voluntary Adoption of International Accounting StandardsJOURNAL OF ACCOUNTING RESEARCH, Issue 1 2007VICENTIU M. COVRIG ABSTRACT We test the assertion that a consequence of voluntarily adopting International Accounting Standards (IAS) is the enhanced ability to attract foreign capital. Using a unique database that reports firm-level holdings of over 25,000 mutual funds from around the world, our multivariate tests find that average foreign mutual fund ownership is significantly higher among IAS adopters. We also find that IAS adopters in poorer information environments and with lower visibility have higher levels of foreign investment, consistent with firms using IAS adoption to provide more information and/or information in a more familiar form to foreign investors. Taken together, our findings are consistent with voluntary IAS adoption reducing home bias among foreign investors and thereby improving capital allocation efficiency. [source] Ideas, Economic Pressures, and Pension PrivatizationLATIN AMERICAN POLITICS AND SOCIETY, Issue 2 2005Raúl L. Madrid ABSTRACT This article maintains that the recent wave of pension privatization has been spurred largely by rising pension expenditures and chronic capital shortages. Many policymakers in Latin America and around the world believed that privatizing their public pension systems would boost their domestic savings rate and resolve the systems' financial problems, thereby reducing their dependence on unstable foreign capital and freeing resources for other, more productive uses. There is no clear evidence that pension privatization will bring these economic benefits, however. To understand why policymakers held these beliefs, we must examine how ideas about pension privatization have formed. Two particularly important factors are the Chilean model and the World Bank's growing influence on pension policy. A probit analysis of the determinants of pension privatization provides support for these arguments. [source] The New Dynamics of East Asian Regional Economy: Japanese and Chinese Strategies in AsiaPACIFIC FOCUS, Issue 2 2006Yasumasa Komori The Japan-led flying-geese pattern of economic development has become obsolete as an accurate description of the pattern of economic relations in East Asia. Meanwhile, the rise of China as the world's production platform has become the most significant factor in transforming the East Asian regional economy. Although the Asian financial crisis served as a major catalyst for the emergence of ASEAN+3, the China factor looms increasingly important in the subsequent development of East Asian regionalism. Despite its enhanced position in the region, however, China's new role in East Asia is clearly different from the role that Japan played at the zenith of its economic prosperity. While Japan's economic engagement in Asia was based on economic penetration by Japanese multilateral firms, China's rapid growth is still predicated upon foreign capital and technology. China's strength lies in its ability to open up its economy for trade and investment. In trade negotiations with ASEAN, China has taken the lead, surpassing Japan, a country constrained by domestic politics. However, Japan remains an important partner for ASEAN countries, not only in providing financial and developmental assistance, but also in hedging against China's dominance. [source] OPTIMAL FOREIGN BORROWING REVISITEDTHE JAPANESE ECONOMIC REVIEW, Issue 3 2010HYEON-SEUNG HUH Foreign capital has become increasingly important in financing investment and growth in developing countries. Foreign capital flows, however, can be volatile as is evident from the recent financial crises. It has also recently been noted by researchers that there is little systematic empirical evidence that foreign capital contributes to the economic growth of developing countries. In this context, this paper attempts to theoretically reevaluate the borrowing behaviour of a developing economy that relies on foreign borrowing for its capital formation. In particular, this paper investigates the implications of different lending policies of international financial institutions. It is found that no matter whether the borrowing interest rate increases with the level of foreign debt per capita or with the foreign-capital/total-capital ratio, the economy always moves toward the stationary state. The result holds even when the representative agent regards the interest rate given as constant. This implies that foreign borrowing does help economic growth, irrespective of lending policies of international financial institutions. [source] LABOUR MARKET DISTORTION, TECHNOLOGY TRANSFER AND GAINFUL EFFECTS OF FOREIGN CAPITAL,THE MANCHESTER SCHOOL, Issue 2 2005SARBAJIT CHAUDHURI This paper purports to show that even in a 2 × 2 full-employment production structure, an inflow of foreign capital may be welfare improving in the presence of labour market distortion. However, the existence of labour market distortion is a necessity to obtain this unconventional result. If an inflow of foreign capital is accompanied by labour market reform, the possibility of welfare gain due to foreign capital diminishes. Therefore, there may exist a trade-off between the policies of growth with foreign capital and labour market reform. However, if the inflow of foreign capital is accompanied by a labour-augmenting type technology transfer, it is found that investment liberalization policy and labour market reform may be undertaken concurrently in a developing economy. [source] Indonesia's Crisis: Implications for the RegionASIAN-PACIFIC ECONOMIC LITERATURE, Issue 1 2000Hadi Soesastro What began as a currency crisis in Indonesia in the third quarter of 1997 rapidly turned into a deep financial crisis with wide-ranging economic and social impacts, and finally became a serious political crisis that exploded in May 1998, forcing President Soeharto to resign. Soeharto's departure, however, did not resolve the crisis. He left behind an economy in shambles, a serious political vacuum and a highly polarised society. The issues to be dealt with are wide-ranging, including the loss of Indonesia's position in the international system, the domination of industry by foreign capital and the imposition by the IMF of a certain model of economic development. Regional and international aspects of the crisis have not become an issue in the public debate and policy discourse in Indonesia. This article looks at these implications. [source] Impact of the QFII Scheme on Investment-Cash Flow Sensitivity,ASIA-PACIFIC JOURNAL OF FINANCIAL STUDIES, Issue 3 2009Jung-Hua Hung Abstract Taiwan is an important emerging economy which has adopted a progressive strategy to open up its securities markets, mainly through the QFII (Qualified Foreign Institutional Investor) scheme. This paper examines Taiwan's QFII experience so as to determine whether the implementation of such a policy has helped reduce corporate investment-cash flow sensitivity. Empirical results suggest that the launching of the QFII program as an interim institutionalization strategy to attract foreign capital into Taiwan's securities markets has been successful in relaxing corporations' investment-cash flow sensitivity. [source] Equity market and foreign capitalCANADIAN JOURNAL OF ECONOMICS, Issue 1 2009Yoko Furukawa Abstract I present a model that demonstrates that the market mechanism is not always effective in stabilizing an open equity market. Foreign capital inflows create multiple equilibria in the equity market, which may simultaneously trigger a currency crisis as well as an equity market crash even if the equity market is well developed. L'auteur présente un modèle qui montre que le mécanisme de marché n'est pas toujours efficace pour stabiliser un marché ouvert d'actions. Les influx de capitaux étrangers créent de multiples équilibres dans le marché des actions, qui peuvent simultanément engendrer une crise de la monnaie et un effondrement du marché des actions, même si le marché des actions est bien développé. [source] Contagion or Real Linkages?CHINA AND WORLD ECONOMY, Issue 4 2007Some Evidence from China's Emerging Parallel Markets F3; G15; P33 Abstract This paper empirically tests the existence of contagion using data on China's five parallel markets with different entry barriers for foreign capital. Taking the 1997 stock market crash as our experiment and using data on A, B and H shares, red chips and American depository receipts, the present paper tests whether these China-backed market returns respond differently to foreign shocks during the pre-1997 and post-1997 crash period. Evidence suggests that the contagion effects are stronger in markets with fewer entry barriers. An important implication of our findings is that countries vulnerable to contagion could be justified to impose some limits on capital flows. [source] | |||||||||||||