Migrant networks are an important catalyst for promoting FDI flows between countries. Migrants also send increasingly large remittances to their home countries. This paper considers how these two capital flows are related, specifically examining how remittance flows respond to the amount of FDI inflows to a country. Using a panel of 118 countries over 1980-2010, we estimate a random effects mod...

The purpose and research objective of this paper is the influence of foreign direct investments on the performance of domestic firms which is analyzed through a case study of Southeast Europe, and in particular of Macedonia. The conception of this analysis uses the methodology of the World Bank’s Enterprise Surveys, which have been conducted on many countries using firmlevel data of representat...

In this paper we present a model of international interest rate arbitrage under conditions of entry and exit costs to and from the domestic capital market. We seek to measure the maximum potential effect of capital controls, such as non-interest paying reserve requirements, on interest rate differentials. We quantify the effect of such taxes using a dynamic optimization model with uncertainty a...

Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment? Governments the world over offer significant inducements to attract inward investment, motivated by the expectation of spillover benefits to augment the primary benefits of a boost to national income from new investment. This paper begins by reviewing possible sources of FDI induced spillovers. It then prov...

Following the notion of skill-biased FDI fl ows from developed to less developed regions, high-skilled workers are likely to benefi t from FDI to a larger extent. They earn a productivity advantage that potentially transfers into a skilled wage premium. This gives rise to distributional confl ict that might turn into heterogeneous attitudes toward FDI infl ows in line with skill. In this paper ...

This paper implements a fair wage constraint in the fashion of Akerlof and Yellen (1990) into an analytically tractable core-periphery agglomeration model. This enables us to study the role of imperfect labour markets for the pattern of agglomeration. We illustrate that, in the short run, a marginal increase in fair wage preferences leads to an unambiguous compression of the national factor pri...

This paper provides a set of empirical tests of the cross-sectional variation of stock volatility and investablility, where investability is defined as the degree to which a stock is accessible to foreigners. Unlike previous studies, which focus on market volatility and market return, we study the relationship between individual stock return volatility and its investablility. Our findings have ...

A Simple Theory of Industry Location and Residence Choice This paper provides a simple theory of geographical mobility which simultaneously explains people’s choice of residences in space and the location of industry. Residences are chosen on the basis of the utility which mobile households obtain across locations. The spatial pattern of industry is determined by the location decision of a scar...

Although FDI is widely believed to have a positive effect on economic growth, the exact mechanism of how FDI impacts upon the development process of the newly industrialising economies is far from being well understood. This paper presents and tests two propositions on the role of FDI in economic growth from a newly industrialising economy’s perspective. First, FDI is a mover of production effi...

This paper examines the relationship between regional economic integration and FDI in North America, where two RIAs have been established over the past decade: a bilateral free trade agreement between Canada and the U.S. (CUSTA) and a trilateral agreement (NAFTA) incorporating Mexico as well. The North American experiences suggest substantially more modest impacts of regional trade agreements o...