The purpose of this paper is to examine the allocation of the FDI flows in the East Asian region among Southeast Asian countries and China. In addition, it will also investigate the role of the public policy and the private firms during the foreign direct investment process in 1990s. In particular, we will emphasize the Taiwan case, since Taiwan has been one of the main contributors in this reg...

How large are the bene…ts of Special Economic Zones and what are the channels of these bene…ts? To shed some light on these questions, I collect a unique dataset of Chinese municipality economic statistics from 1978 to 2007 and use it to evaluate the impact of a Special Economic Zone experiment aimed at attracting foreign direct investment. Guided by three predictions from a theoretical model, ...

We examine the choice between Foreign Direct Investment and Foreign Portfolio Investment at the level of the source country. Based on a theoretical model, we predict that (1) source countries with higher probability of aggregate liquidity crises export relatively more FPI than FDI, and (2) this effect strengthens as the source country’s capital market transparency worsens. To test these hypothe...

This paper employ hand-collected data concerning foreign strategic investment and corporate governance in the Chinese banking sector, we examine whether foreign strategic investment improve the corporate governance of Chinese banks and whether corporate governance improve performance of Chinese banks. We found that foreign strategic investment increases the binding force for top three sharehold...

China’s foreign investment law regime has experienced significant changes in recent years. A milestone came with the passing of Foreign Investment Law (FIL) 2019, replacing laws and regulations that had governed China for four decades. This article first undertakes a political economic analysis to determine relevance internal external factors contributing changes. It then discusses key characte...

ARIFF reductions, falling transport costs, and reduced barriers to international capital flows have created extensive opportunities for multinational firms operating in increasingly integrated global markets. In the midst of rapid integration and globalization, firms still face tax systems that differ among countries, and these differences have the potential to affect major investment and finan...

We examine a large number of potential home bias determinants, including some novel ones, using extensive panel data. We distinguish between the actual home bias (overinvestment in domestic securities) and foreign investment bias, for which we propose a new measure. For foreign investment bias, we also demonstrate how “size biases” significantly affect the results. We find that the old empirica...

This article is about China’s outward foreign direct investment, a relatively new but fast-growing feature of the global economy. It is causing concern and uncertainty in many recipient countries that, more generally, happily welcome foreign direct investment. The author explores some of the reasons why. The article examines, in particular, the state ownership and management of major Chinese co...

Empirical evidences show that Japan-based companies moved their major operations to the USA due to the currency appreciation of Japanese Yen in 1980s. However, the multinational firms moving their operations abroad still face both the risk of foreign price and the risk of foreign exchange rate. According to the purchasing power parity (PPP) and interest rate parity (IRP), the foreign exchange r...

This paper develops a firm-dynamics model with heterogenous firms and endogenous currency debt composition to jointly study financing and investment decisions in developing economies. In our model, foreign currency borrowing arises from a trade-off between aggregate deviations from the risk-free uncovered interest rate parity and firms’ growth potential. Crucially, there is crosssectional heter...