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Foreign portfolio investment

About: Foreign portfolio investment is a(n) research topic. Over the lifetime, 3038 publication(s) have been published within this topic receiving 79748 citation(s).
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Journal ArticleDOI
Abstract: Governments often promote inward foreign investment to encourage technology 'spillovers' from foreign to domestic firms. Using panel data on Venezuelan plants, the authors find that foreign equity participation is positively correlated with plant productivity (the 'own-plant' effect), but this relationship is only robust for small enterprises. They then test for spillovers from joint ventures to plants with no foreign investment. Foreign investment negatively affects the productivity of domestically owned plants. The net impact of foreign investment, taking into account these two offsetting effects, is quite small. The gains from foreign investment appear to be entirely captured by joint ventures.

2,605 citations

Journal ArticleDOI
01 Feb 1971-Economica
Abstract: As trade follows the flag, so does applied economics follow the newspapers. Urgent issues of public policy have in the past decade or so called forth a great deal of new factual evidence on the international corporation, as the chief conduit for foreign direct investment.2 It has been studied as a channel for the international transfer of technology, as a business organization serving more than one national sovereign master, and as a force influencing the international financial flows recorded in a country's balance of payments. Yet relatively little emphasis has fallen on what might seem the two principal economic features of direct investment by the international corporation: (1) it ordinarily effects a net transfer of real capital from one country to another; and (2) it represents entry into a national industry by a firm established in a foreign market. This neglect is unfortunate, because recognition of these features lets one bring to bear on the causes and consequences of direct investment two important bodies of economic analysis-the pure theory of international trade and the conceptual structure and evidence of market behaviour reposing in the field of industrial organization. Briefly, the argument of this paper is that foreign direct investment occurs mainly in industries characterized by certain market structures in both the "lending" (or home) and "borrowing" (or host) countries. In the parlance of industrial organization, oligopoly with product differentiation normally prevails where corporations make "horizontal" investments to.produce abroad the same lines of goods as they produce in the home market. Oligopoly, not necessarily differentiated, in the home market is typical in industries which undertake "vertical" direct investments to produce abroad a raw material or other input to their production process at home. Direct investment tends to involve market conduct that extends the recognition of mutual market dependence-the essence of oligopoly-beyond national boundaries. Likewise it tends broadly to equalize the rate of return on (equity) capital throughout a

2,205 citations

01 Jan 2000-

1,517 citations

Journal ArticleDOI
01 Apr 2000-Journal of Finance
Abstract: We propose a cross-sectional time-series model to assess the impact of market lib- eralizations in emerging equity markets on the cost of capital, volatility, beta, and correlation with world market returns. Liberalizations are defined by regulatory changes, the introduction of depositary receipts and country funds, and structural breaks in equity capital flows to the emerging markets. We control for other eco- nomic events that might confound the impact of foreign speculators on local equity markets. Across a range of specifications, the cost of capital always decreases after a capital market liberalization with the effect varying between 5 and 75 basis points. THROUGHOUT HISTORY AND IN MANY MARKET ECONOMIES, the speculator has been characterized as both a villain and a savior. Indeed, the reputation of the speculator generally depends on the country where he does business. In well- functioning advanced capital markets, such as the United States, the specu- lator is viewed as an integral part of the free-market system. In developing capital markets, the speculator, and in particular the international specula- tor, is looked upon with many reservations. Recently, many so-called "emerging" markets have opened up their capital markets to foreign investors, creating an ideal laboratory for examining the impact of increased foreign portfolio investment in developing equity mar- kets. Our main focus is the impact on expected equity returns-the cost of equity capital. However, we also examine the effects of increased foreign

1,492 citations

Journal ArticleDOI
01 Feb 1985-World Development
Abstract: Four models explaining the flow of foreign direct investment in 80 less developed countries are econometrically estimated and compared by ex post forecasts. A politico-economic model which simultaneously includes economic and political determinants performs best. The higher the real per capita GNP and the lower the balance of payments deficit are, the more foreign direct investment is attracted. Among the political determinants the amount of bilateral aid coming from Western countries and multilateral aid has a stimulating effect, while help from communist countries has a negative effect. Political instability significantly reduces the inflow of foreign direct investment.

1,068 citations

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No. of papers in the topic in previous years

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Topic's top 5 most impactful authors

Efraim Sadka

8 papers, 156 citations

Assaf Razin

7 papers, 246 citations

April M. Knill

5 papers, 30 citations

Kiyoshi Kojima

5 papers, 326 citations

Nigel Driffield

4 papers, 432 citations