World Market Integration through the Lens of Foreign Direct Investors

Albuquerque, Rui ; Loayza, Norman ; Serven, Luis

World Bank, Washington, DC

关键词: ARBITRAGE;    ASSETS;    ASYMMETRIC INFORMATION;    CAPACITY BUILDING;    CAPITAL INFLOWS;   

DOI  :  10.1596/1813-9450-3060
RP-ID  :  WPS3060

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The authors analyze the unparalleledincrease in foreign direct investment to emerging marketeconomies in the past 25 years. Using a large cross-countrytime-series data set, the authors evaluate the dependence offoreign direct investment on global factors or worldwidesources of risk (that is, factors that drive foreign directinvestment across several countries). They construct aglobalization measure that equals the share of explainedvariation in direct investment attributable to globalfactors. The authors show that the globalization measure hasincreased steadily for industrial and developing countries.For the full sample of countries, the globalization measurerose eightfold from 1985 to 1999. Furthermore, in recentyears developing countries' exposure to global factorshas approached that of industrial countries, particularlyfor Latin America. Finally, the globalization measurecorrelates strongly with measures of capital marketliberalization. Overall the authors find strong support forthe hypothesis of increased market integration which impliesa greater role for worldwide sources of risk. They discussthe implications of the results for public policiesregarding capital market liberalization and policiesdirected at attracting foreign investment.