Colorado College Logo

  DigitalCC

Use AND (in capitals) to search multiple keywords.
Example: harmonica AND cobos

FDI : a response to global and local variables

by Gaudette, Jeffrey S.

Abstract

Economic literature has long shown that capital flows and their volatilities are important for the development, growth and economic stability of economies. Developing countries have been increasingly integrated into the world market exposing their capital inflows to global shocks in addition to domestic shocks driven by country specific characteristics. This paper aims to quantify the effects of the global and domestic factors on capital inflows using FDI as a proxy. Using panel data for 84 countries spanning 1970-2009, the model was estimated using fixed effects. There are four major findings from this study. First, the importance of global and country specific effects depends on the country ‘s stage of development. In particular, financial depth is the only important contributor to FDI in emerging countries. Second, the 2008 Financial crisis positively affected the inflows to developing countries showing a redistribution of assets by investors. Third, the insignificance of exchange rate risk for FDI may indicate the ability of investors to hedge against exchange rate risk.

Note

bachelor

Bachelor of Arts

Includes bibliographical references.

Administrative Notes

None

Copyright
Copyright restrictions apply.
Publisher
Colorado College
PID
coccc:3360
Digital Origin
born digital
Extent
46 pages : illustrations
Thesis
Senior Thesis -- Colorado College
Thesis Advisor
Khraiche, Maroula
Department/Program
Department of Economics and Business
Degree Name
bachelor
Degree Type
Bachelor of Arts
Degree Grantor
Colorado College
Date Issued
2011